UNIT 1 (BSBFIA401)

TASK 1,2,3,4
Name: Amit Chhetri
Student ID: AIA220028

TASK 1, ANSWERS

1. The fundamental tenet of double entry accounting is that every single financial
transaction is recorded twice. The debit entry is one entry, and the credit input is
another. The entries are frequently shown as 'T' accounts. The amount of the debit
entries must always equal the sum of the credit entries in this system in order to
successfully perform the double entry.

2. Below are three accounting "golden rules" and how they relate to double entry
accounting:

● Credit the giver and debit the recipient.

Personal accounting takes advantage of this principle. These accounts pertain to
various people or businesses.
● Debit all expenses and losses, credit all incomes and gains.
Nominal accounting employs the aforementioned principle. Businesses use
nominal accounts, also referred to as temporary accounts, to record incomes,
losses, expenditures, and gains over a given accounting period.
● Debit what comes in, credit what goes out.
In the context of real accounting, this principle is applied. The accounts with real
balances, also referred to as permanent accounts, are the ones whose opening
balances are carried over to the following year. Examples of these accounts that
are not closed at the end of the fiscal year include cash, fixed assets, accounts
receivable, payable, retained earnings, and accounts payable.

3. A general journal is a thorough record of a company's financial transactions that is used

to transfer them later to other official records like the general ledger. The general
journals include the following four special journals:

Sales Journal
In an accounting system, it is the principal entry book that is used to track sales. It
maintains accurate records of the sales of the goods that clients buy.
Purchases Journal
 Another important journal in the accounting system that businesses use to track
customer credit purchases is the purchases journal.
Cash Receipt Journal
All of the business's cash inflows are managed with the aid of this journal. As a result, it
is used to track all of the money that enters the company.
Cash Disbursements Journal
This journal is used to track the business organization's cash outflows.

4. Transaction data is divided by type into accounts for assets, liabilities, owners' equity,
revenues, and expenses in the general ledger. This information is used to create the
company's financial statements. Opening entries and purchases of non-current assets
made on credit are a few examples of transactions that are recorded in the general
ledger.
5. Fair value is the sum that, at the measurement date, would be received for the sale of an
asset or paid for the transfer of a liability in an orderly transaction between market
players. The total value of all the assets and liabilities included on a corporation's
financial statement is known as the total value in accounting systems.
6. The occupational health and security issues are:
● Psychological hazards
The risks include those that can seriously endanger and negatively impact an
employee's mental health at work. These risks include stress, workplace
violence, and sexual harassment, to name a few.
● Safety Hazards
These are the hazards which lead to an unsafe working environment for all the
employees.
● Physical Hazards
These risks result from environmental variables that can hurt workers without
even coming into contact with them. Height, radiation, noise, and pressure are a
few examples.
7. The accounting firm would need to take the following actions in this situation:
● The business must disclose it and do so in accordance with the applicable laws
and software. The consent of the clients is required for the execution of the
complete code of practise.
● Clients must be informed by the company of the storage of their data on a cloud
server and the specific nation where the server is situated.
8. In this situation, you must communicate with the government and disclose all charges as
well as all supporting evidence. You must also let the parties know whether they have
complied with the law's and the organization's reporting requirements.
9. Threats can arise from a wide variety of connections and situations. A professional
accountant's adherence to the fundamental principles may be compromised, or may be
seen to be compromised, when a relationship or condition provides a threat.
10. The ASIC plays a significant part in the approval of the standards of conduct for the
financial services industry. The must adhere to a specific set of guidelines in order to
 satisfy a variety of requirements. These rules have a detailed structure and were
primarily formulated by the body after consultation with the interested parties.
The criteria for the ASIC if as following:
● Independent management, including business oversight.
● the application of regulations to all parties involved
● in accordance with the law and with efficient administration.
11. ASIC has a formal set of codes created by the financial service industries but never
oversees administration. Customers can benefit from this as well.
For Expample: The code of conduct for banking practises is created by the Australian
Bankers Association.
12. The purpose of ASIC is to protect Australian customers by regulating financial services,
companies, and law enforcement.
The types of laws which ASIC administers are:
● Superannuation industries supervision Act 1993
● Retirement saving act 1995
● Corporations act 2001
● Life insurance act 1995
13. A. The majority of goods, services, and other items that are sold or consumed in
Australia are subject to the 10% goods and services tax (GST).
B. Food and Education are two things which do not attract GST.
C. There are two ways to report GST on Business Activity Statement: cash or accrual.
D. If a supplier fails to submit an ABN, a penalty of 47% of the tax-related charge would
be levied.

14. There are two basic posting methods in computerized accounting systems:
a. Real time posting
It alludes to a way that core banking systems process financial transactions. In
this one, a specific transaction is posted to its relevant general ledger, subsidiary
ledger, and specific journal.
b. Batch Posting
In this method, the items are moved linearly from the journal to the ledger, then
to the financial statement. In this system, the transactions are categorised and
handled by subledger. The results of this entry don't immediately show up in the
main ledger.

15. We will review the organisational rules and procedures as well as the necessary
documents to ensure that we have all the information needed to compile the financial
report at the end of the month.
16. In this case, all the source data and papers would be necessary, and it would be
necessary to double-check all the data with the sources.
It would also be essential to speak with the manager about the mistakes and request
solutions for the aforementioned. Prior to entering the complete data set into the system,
all of this should be taken care of.
 While writing the end-of-month financial report, you may also conduct an online search
for the information offered for all the questions and queries.
17. The revenue recognition concept is the foundation for the balance day adjustments,
which are based on making adjusting entries for unearned and accrued revenues under
accrual-basis accounting.
It will be further divided into two categories:
Accrued Expenses
According to the company's existing accounting processes, these expenses have
not yet been paid.
Accrued revenues
These revenues are still pending payment.
Again, there are two types of balance day adjustments that are necessary for
prepayments:
Prepaid expenses
These are the expenses that have been pre-paid.
Unearned revenue
Although the firm has already given the services or products, this revenue has
not yet been received by the company.

18. It is because over time, wear and tear from the assets would lead the fixed
assets to eventually lose their residual value. If the cost of purchasing the assets
is recorded annually in the records, it is impossible to ascertain their actual value.
Depreciation is therefore necessary for an accurate estimate.
19. Depreciation is the process through which any commercial asset loses value
over time. The value of the non-current asset is allocated as an expense in the
allocation approach. The approach to valuation is similar to appreciation in that it
makes use of the asset's value to produce income.
20. In order to account for changes in residual values, it is crucial that estimates of
the useful lifetimes and estimated residual values of depreciable non-current
assets be revised every year. First, the asset's complete useful life is established,
and an estimation of the events is crucially needed. It is necessary because it is
difficult to complete without knowing in advance how a certain asset will be used
after it has been sold in the market.

TASK 2, ANSWERS

Question No. 1, Answer

Date Account DR CR
 1/07/2016 Plant and equipment 18000

Account Payable 18000

Bench Planner being purchased (asset no. 346)

1/07/2017 Plant and equipment 5000

Account Payable 5000

Standing drill being purchased (asset no. 348)

1/07/2017 Depreciation 2720

Depreciation 2720

Depreciation of bench planner

1/07/2017 Depreciation 1050

Depreciation 1050

Depreciation of standing drill

Workings for the depreciation calculation

Bench planer (Asset No. 346): unit of production method
Depreciable amount = original cost – residual value = 18000-1000 = 17000
Year 1 (2016 - 2017) depreciation expense = (800/5000)*17,000 = 2,720
Year 2 (2017 - 2018) depreciation expense = /2017:(1,000/5,000)*17,000 = 3,400

Journal entries for the year ended 30 June 2018

Date Account DR CR

30/06/2018 Depreciation (2017- 3400

2018)

Plant and 3400

equipment
accumulated
depreciation

Accumulated Depreciation of bench planner

30/06/2018 Depreciation (2017- 1050

 2018)

Plant and 1050

Equipment
accumulated
depreciation

[To record the depreciation for standing drill (Asset No. 348)]

Workings for the depreciation calculation

Bench planer (Asset No. 346): unit of production method
Depreciable amount = original cost – residual value = 18000-1000 = 17000
Year 1 (2016-2017) depreciation expense = (800/5000)*17,000 = 2,720
Year 2 (2017-2018) depreciation expense = 2017:(1,000/5,000)*17,000 = 3,400

Standing drill (Asset No. 348): straight-line method

Depreciable amount = original cost – residual value = 1000
Year 1 (2016-2017) depreciation expense = $4,200 / 4 = $1,050
Year 2 (2017-2018) depreciation expense = $4,200 / 4 = $1,050

Question No. 2, Answer,

Andrew’s Slabs – Register of Machinery

Asset Name: Bench planner

Asset No: 346
Date Purchased: 1/07/2016
Location: Seven hills
Total Usage: 1800
Estimated Residual Value: 1000
Depreciated Method: Unit of production
Depreciation Rate: 1,800/18,000 = 0.1
Purchased from: Mullum machinery

Date Details Assets Accumulated Depreciation

DR CR BALANCE DR CR BALANCE

1/07/20 Cost Price 18000 18000

16

30/06/2 Depreciation 2720 2720

017 Usage

30/06/2 Depreciation 2720 2720

018 Usage

Andrew’s Slabs—Registry of Machinery

Asset Name: Standing Drill

Asset No: 348
Date Purchased: 1/07/2016
Location: Seven hills
Estimated Life: 4 years
Estimated Residual Value: $800
Depreciated Method: Straight Line method
Purchased from: Danny’s Drill

Date Details Assets Accumulated Depreciation

DR CR BALANCE DR CR BALANCE

1/07/20 Cost Price 500 500

16

30/06/2 Depreciation 1050 1050

017

30/06/2 Depreciation 2010 2010

018

Question No. 3, Answer

No. Particulars DR CR

1. Accounts receivable - Lennos furniture 3300

Accounts receivable - kings cliff kitchen 3300

2. Timber expense 800

Purchase 800

3. Sale 1210

Kitchen Slab 1210

Question No. 4, Answer,

DR CR

Account receivables 500

Fee received 500

GST collected 50

[To record the consulting services provided to Company LTR 92 days ago]

Bad debts expenses 500

GST collected 50

Provision for doubtful debts 550

[To record as doubtful debts when more than 60 days overdue]

Provision for doubtful 550

Account receivables 550

[To write off the debts after 90 days if the debt cannot be collected by a debtcollection
agency]

Show the general ledger entries you would make to record this bad debt.

DR CR

Bad Dept 550

Consulting Fees 500

GST Income 50
 TASK 3, Answers,
Question no. 6,

Andrew’s Slabs Delivery Truck

Asset Cost: 30000
Less Residual value: 14700
Depreciation Amount: 9000
Depreciation method: Diminishing balance
Depreciation Rate: 30%
Solution:-
Year Ending Carrying Depreciation Accumulated Carrying
amountat Depreciation amountat
beginning end
30/06/2015 30000 9000 9000 21000
30/06/2016 21000 6300 15300 14700

Workings for the depreciation calculation: 30,000*30% = 9000

Delivery Truck: diminishing balance method
Year 1 (2014 - 2015) depreciation expense = 9000
Year 2 (2015 - 2016) depreciation expense = 6300

Question no, 7

Date Accounts DR CR
30/06/2016 Depreciation 9000
Depreciation 9000
Expense
Question No, 8

Motor Vehicle
Date Details DR CR BALANCE
Purchase of 30000 30000
Truck A

Motor Vehicle Accumulated Depreciation

Date Details DR CR Balance
30/06/2014 Depreciation 9000 9000
30/06/2018 Depreciation 6300 15300

Depreciation Expenses
Date Details DR CR Balance
30/06/2015 Accumulated 9000
Depreciation
Profit and 9000 9000
Loss
30/06/2016 Accumulated 6300
Depreciation
Profit and 6300 6300
Loss
Question No, 9 Answers,

Andrew’s Slabs
Balance Sheet
For the year ended 30/6/2016
ASSETS
CURRENT ASSETS
NON-CURRENT ASSETS
Motor Vehicle
Motor Vehicle at cost : 30000
Less: Accumulated depreciation : 15300
Motor Vehicle (Net) 14700
TOTAL ASSETS

Andrew’s Slabs
Profit & Loss Statement
For the year ended 30/6/2016

REVENUE
EXPENSES
Depreciation expenses : 6300

Date Accounts DR CR
31/03/2018 Depreciation 3307.50
Expense
Motor vehicle 3307.50
accumulated
depreciation
Write off the accumulated depreciation:

Date Accounts DR CR
31/03/2018 Motor vehicle 18607.50
accumulated
depreciation
Motor vehicle 18607.50

Question no. 10, Answer,

Gain or loss of the trade-in:

Book value of the Truck A as at 31 March 2018 =
Trade-in value =
Loss on trade-in/disposal of Truck A =

Date Account DR CR
31/03/2018 Accounts 8800
payable (trade
in)
Proceed from 8800
tred in/ non-
current asset
GST 800
Carrying amount 11392.50
of the non-
current asset
(O/C
30,000*18,607.5
0 = 11,392.50
Motor vehicle 11392.50
30/03/2018 Motor vehicle 40000
(new truck)
GST Paid 4000
Accounts 8800
payable
Cash at Bank 352007

Task 4, Answers

Question No. 12, Answer

Adjustment Accounts DR CR
A. Depreciation 4500
expenses
Accumulated 4500
Expenses
Working: Straight line method: Depreciation expenses = 45,000*10% =
$4,500
B. Depreciation 5468.75
expenses
Vehicle 5468.75
Accumulated
Expenses
Working: diminishing method: depreciation expenses=($50,000-
$6,250)*12.5% =$5,468.75
C. Rate 600
Cash At Bank 600
D. Salaries 3500
Accounts 3500
payable
E. Interest 1300
Receivable
Interest revenue 1300
F. Bad debts 2600
expenses
Allowances for 2600
bad debts
Working: allowance for doubtful debts = 5%*52,000 = $2,600
G. Closing 1200
inventory (cost of
goods sold)
Inventory(assets 1200
)

Question No. 13, Answer,

Dear Assessor,
The truck cost us $30,000 when we purchased it in 2016, and after
the first year, it began to lose value. Depreciation was initially $9000, and
after the second year, it was $6300. Therefore, the total accrued
depreciation for the two years is $15,300.

Thank You soo Much

Question No. 14, Answer,

Attending Meeting.
Question No. 15, Answer,

Trial Balance

Details DR CR
Cash at bank 10100
Account 53300
Receivable
Doubtful 2600
Debts
Inventory 18800
Equipment 45000
Accumulated 14500
depreciation
on
equipment
Vehicles 50000
Accumulated 11719
depreciation
motor
vehicles
Land 27500
Accounts 28500
payable
Loan 85000
Capital 81430
Sales 120000
revenue
 Interest 3300
revenue
Cost of 87450
goods sold
Bad debts 2600
Depreciation 9,969
expenses
Salaries 33,500
expense
Rates 21008
expense
Stationery 8008
expense
Advertising 1900
expense
Interest 300
expense
Motor 780
Vehicle
expense
Repairs 2500
Expense
Insurance 450
Expense
Total 3,47,049 3,47,049

Balance Sheet

Current Assets
 Cash at 10100
Bank
A/c 53300
receivable
s
Inventory 18800
Current 19049
earning
Total current assets =
1,01,249

Current Liabilities
Accounts payable 28500
Doubtful Debts 2600
Accumulated 14500
depreciationon
equipment
Total current 45600
liabilities

Non Current Liabilities

Loan 85000
Accumulated 11719
depreciationon Motor
vehicles
Total Liabilities 1,43,319
Total Assets 122500
Total Equityand 223749
Liabilities

Profit and Loss

Sales revenue 120000
Interest Revenue 3300
Total Revenue 123300
Cost of goods sold 87450
Trading Profit 36850
Fixed operating
expenses
Bad debts 2600
Depreciation expenses 9969
Salaries expense 33500
Rates expense 2100
stationery expense 800
Advertising expense 1900
Interest expense 300
Motor Vehicle expense 780
Repairs Expense 2500
 Insurance Expense 450
Net Profit -19049

Question No. 16, Answers,

Submit this Excel file to your assessor.