Preparation of Financial Reports

Student
ID Number		Contact Number
Name

Teacher Name

Unit Details
Unit Code	Unit Title
BSBFIA401	Prepare Financial Reports

Assessment Task
Title	Due Date
Assignment 2: Prepare Financial Reports	As per unit outline

Extension Details (where applicable)
Extension Date for Submission Granted Until

STUDENT DECLARATION
I have completed this assessment I am aware that penalties exist for plagiarism. Refer to the Plagiarism and Misconduct page. I have a copy of this assessment
STUDENT SIGNATURE:		DATE:
For electronic submissions only: By typing your name in the student signature field, you are accepting the above declaration.

Section 1 – Student and Assessor Instructions
Conditions	This is an individual open book assessment, to be completed after you have finished up to and including chapter 4. Download the assessment document from Canvas and complete the reports as instructed. Save in Microsoft Word format (or Excel) and upload your assignment via Canvas. If you have any questions about this assessment please ask your teacher prior to submission.
Task Overview and/or Description	Instructions From the information provided at the end of this document you are required to: Prepare a statement of comprehensive income Prepare a statement of financial position Assessment Description This assessment will demonstrate your understanding of the processes involved in preparing financial reports at the end of the accounting period. As the ‘bookkeeper’ you should be able to demonstrate that you can: – Prepare a revenue statement (statement of comprehensive income) in accordance with organisational requirements to reflect operating profit for the reporting period Prepare a Statement of financial position to reflect the financial status of business at the end of reporting period Identify and correct or refer any errors for resolution. All in accordance with organisational policy, procedures and accounting requirements.

Section 2 – Assessment Task Submission Information

Submission Details

Submit the following: Submit your completed reports for review. Before submitting please check that: You have completed both financial statements That your statement of financial position balances That all line items are correctly classified. The assessment task must be submitted via Canvas with an assessment cover sheet. Ensure to include on the front page or in the header or footer of your assessment: your name student ID your teacher’s name the unit code/s and title/s Submissions received after the submission date must be approved by your teacher.

Section 3 – Assessment Task Criteria and Outcome
All items/criteria must be demonstrated satisfactorily to achieve this task. The items/criteria for this activity will be assessed as S – Satisfactory or US – Unsatisfactory.
Required Evidence	S	US
1	Prepare revenue statement in accordance with organisational requirements to reflect operating profit for reporting period
2	Prepare balance sheet to reflect financial position of business at end of reporting period
3	Identify and correct, or refer errors for resolution in accordance with organisational policy and procedures

Feedback to Student

Feedback will be provided to you in Canvas via comments and/or the Rubric.

Section 4 – General Assessment Information

Refer to the Course Information section in Canvas.

Assessment Part A: Preparation of Financial Reports

Jane Lent from Jane’s Design World has provided you with the final Trial Balance for the reporting period. Using the information provided you are required to:

1. Prepare a statement of comprehensive income for the year ended 30 June 2021.
2. Prepare a statement of financial position as at 30 June 2021.
3. All work must be carried out in accordance with Jane’s Design Worlds policies and procedures which are available in Canvas.
4. Before preparing the final reports, you will first need to check that the Trial Balance is correct and that the Debits and Credits balance. Refer to the instructions on the next page

Before preparing the required financial reports, Jane has asked you to the check the Trial Balance as she is aware that there are some errors, and as a result she can’t get the Trial Balance to balance!

When you have identified the errors, make a note of them in the space provided below, and make the alterations in the Trial Balance, so that it balances and can then be relied on to prepare the Financial Reports.

Check the corrections with Jane (aka your teacher) and have her approve the corrections before proceeding to prepare the reports.

Errors identified

Error	Correction Required

Discuss the above error corrections with Jane (aka your tutor) and provide a copy of the updated ‘balanced’ Trial Balance for approval before proceeding.

Final approval

The Trial Balance has been reviewed and now presents a true picture of the general ledger balances for the year ended June 2021 Final Approval: Signed off by Manager Jane Lent …………………………………………………..

Note: Send a message to your teacher via Canvas, including the above tables and a copy of the revised balanced Trial Balance in a separate document, seeking approval and authorisation that your revised Trial Balance is correct.

When you and your teacher are satisfied that you have the correct trial balance, you can then proceed. Your teacher will return the document with their signature of approval to signify that you can continue.

Jane Design World
Trial Balance as at June 30, 2021.
	Debit	Credit
	$	$
Accounts Receivable	54,690
Accounts Payable	32,875
Accrued Income	3,450
Accrued expenses		5,450
Accumulated Depreciation – Motor Vehicles		42,000
Accumulated Depreciation – Computer equipment		12,900
Allowances for Doubtful Debts		2,125
Advertising	10,560
Bank Fees and Charges	780
Bad Debts	925
Capital: Jane Lent		285,700
Cartage Inward	15,400
Cash at bank	16,990
Commission Income		6,200
Computer Equipment	33,000
Customs Duty	9,600
Delivery expenses	112,500
Depreciation – Motor Vehicles	21,000
Depreciation – Computer equipment	6,525
Discount Expense	4,350
Doubtful Debts	2,125
Drawings: Jane Lent	13,800
Goodwill	20,000
GST Collected		6,980
GST Paid	3,250
Insurance – General	4,950
Interest on Loan	6,850
Insurance on stock	5,400
Land and buildings	475,000
Long Term Loan		65,000
Loss on Sale of Motor Vehicles	5,800
Motor Vehicles	65,000
Motor Vehicle Expenses	11,350
Mortgage on Land		150,000
Office Wages	23,600
Petty Cash	500
Prepaid Income		8,750
Prepaid Expenses		6,500
Profit on Sale of Non-Current Asset		9,500
Provision for Annual Leave		12,000
Provision for Long Service Leave		38,000
Purchases Returns and Allowances	6,750
Purchases	275,640
Rental Income		9,750
Rates expense	1,395
Sales Returns and Allowances	6,850
Sales		696,700
Stock (1/7/19)	45,300
Shares in HBP Pty Ltd	80,000
Wages – salespersons	47,600
Total	$1,423,805.00	$1,357,555.00

Balance Day Adjustment
Stock on hand (30/6/2021)	$ 85,700.00

Jane’s Design World
Statement of comprehensive income for year ended 30 June 2021
	$	$	$	$
Income
Revenue(from ordinary activities)
Sales			$696 700
Less Sales return and Allowance			$6 850
Total Sales Income				689 860
Less Cost of Sales
Stock on 1 July 19
Purchases
Less purchases returns and allowance
Net purchase
Cartage inward
Custom Duty
Insurance on Stock
Less Stock on 30 June 2021
Total cost of sales
Gross Profit
Other Income (from ordinary activities)
Commission Income
Rental Income
Total other income
Gains (outside the ordinary activities of the business)
Profit on sale of N C A
Total Gains
Total Income
Less Expenses and Losses
Selling and Distribution Expenses
Advertising
Delivery Expenses
Wages – Salesperson
Administration Expenses
Office Wages
Insurance – general
Rate’s expense
Financial Expenses
Interest on loan
Bad Debts
Bank Fees and Charges
Doubtful Debts
Total expenses (from ordinary activities)
Losses (outside the ordinary activities of the business)
Loss on Sales of M V
Total expenses and losses
Net Profit or Loss
OTHER COMPREHENSIVE INCOME
Comprehensive Income or loss
Notes accompanying statement of comprehensive Income

Jane’s Design World
Statement of financial position as at 30 June 2021
	$	$	$	$
Owners’ Equity
Total Owners equity
This is represented by:
Current assets
Non-current assets
Property, plant and equipment
Intangibles
Investments
Total assets
less LIABILITIES
Current liabilities
Non-current liabilities
Total liabilities
Net assets

Assessment Part B: Xero

For this part of the assessment you will be preparing the financial reports using the Xero organisation Swin Reporting Org. (you teacher will have sent you a Xero invitation to this organisation).

You are required to:

• Print to PDF a copy of the Profit and Loss and Balance Sheet for the year ended 30 June 2021
• Enter manual journals to record the balance day adjustments listed below. (You will need to create some new accounts in the chart of accounts before you can record these adjustments).

Record a separate journal for each BDA, as the tax affect may be different for each entry.

• Office Equipment Depreciation: $2,300
• Accrued Wages: $9,700
• Rent Expense owing but not yet paid: $1,100 (incl GST)
• Prepaid Contractor expense: $800 (excl GST)

• Print updated copies of the Profit and Loss and Balance Sheet
• Answer the following questions in relation to the updated reports.
• Submit your 4 PDF reports to Canvas along with your completed Part A

Question 1

What has happened to the Gross Profit and Net profit as a result of the balance day adjustments?

Gross Profit:

Net Profit:

Question 2

Why has the Total Asset figure changed by $1,500 in the revised balance sheet? Please be specific in your analysis!

Assessment Part C: Knowledge Questions.

Please answer all questions in your own words

1. In a minimum of 50 (fifty) words, provide an explanation of the principles of double entry bookkeeping.
   
   

2. In 50-100 words, describe the purpose of Balance Day Adjustments. What is the importance of the Matching principle in relation to Balance Day Adjustments?
   
   

3. Which Accounting standard sets out the guidelines for the presentation of Financial Reports?

4. What is the objective of the Accounting Standard you listed in Q3, and how does it aim to achieve this?

5. What is the purpose of the General Ledger

6. List 2 (two) basic functions of an organisations accounting (information) system.

7. What accounting controls should be in place to assist to minimise and detect errors? (refer textbook page 80)

8. An accounting system must be designed to meet the needs of the users of the accounting information it provides. What 3 (three) factors will help to determine how the system should be designed?