ACCY801 Business Accounting Report Editing and Proof Reading Services

ACCY801 Business Accounting Report Oz Assignments

ACCY801 Business Accounting Report Editing and Proof Reading Services

Introduction

A report has been prepared on the financial accounting cycle for Paul services as on 30 June 2016. It includes all the business concepts and all the steps for preparation and finalization of the books of accounts including the posting of the journal entries, posting them to the respective ledger accounts, preparing the unadjusted trial balance on the basis of the same, posting the adjustment entries at the end of the accounting period and preparing the adjusted trial balance. Post all this done the income thesis statement is being prepared and the closing journal entries is being passed for closing the books of accounts. Post all this, the balance sheet and the statement of changes in equity is being prepared at the end of the period and that marks the closure of books for an accounting period. Towards the end, the reason for preparing each of the reports and passing journal entries has been mentioned[ CITATION Gre17 \l 1033 ].

Analysis and Calculation

The initial unadjusted trial balance of the given company as on 30^th June has been shown below

Paul services Trial Balance As At 30 June 2016
Acc No	Account Name	Unadjusted
		Debit		Credit
101	Cash at Bank	48,100
105	Accounts Receivable	16,030
115	Supplies	1,480
120	Prepaid Insurance	2,960
135	Office Furniture	37,000
137	Acc. Depreciation. - Furniture			-
140	Office Equipment	74,000
141	Acc. Depreciation - Equipment			-
145	Store Equipment	111,000
146	Acc. Depreciation - Equipment			-
170	Automobile	148,000
171	Acc. Depreciation - Automobile			-
201	Accounts Payable			32,060
201	Interest Payable			48,090
201	Unearned revenue			18,500
201	Loan Payable			7,400
201	Mortgage Payable			148,000
201	Paul's Capital			48,898
201	Paul's Drawings	148
201	Revenue			148,000
201	Advertising Expense	1,000
201	Automobile Expense	5,775
201	Depreciation Expense - Furniture	-
201	Depreciation Expense - Equipment	-
201	Depreciation Expense - Store Equipment	-
201	Depreciation Expense - Automobile	-
201	Insurance Expense	800
201	Maintenance Expense	3,500
201	Miscellaneous Expense	1,155
201	Rent Expense	-
201	Supplies Expense	-
201	Utilities Expense	-
201	Interest Expense	-
Total			450,948		450,948

For the given year, the adjustment journal entries have been shown below:

Paul Services
Adjustment Journal Entries
Date	Particulars	Dr./Cr.	Amt	Amt
30-Jun	Interest Expense	Dr.	14,800
	To Accrued Interest	Cr.		14,800

30-Jun	Insurance Expense	Dr.	2,368
	To Prepaid Insurance	Cr.		2,368

30-Jun	Depreciation Expense - Furniture	Dr.	2,219
	To Acc. Depreciation. - Furniture	Cr.		2,219

30-Jun	Depreciation Expense - Equipment	Dr.	5,370
	To Acc. Depreciation - Office Equipment	Cr.		5,370

30-Jun	Depreciation Expense - Store Equipment	Dr.	4,370
	To Acc. Depreciation - Store Equipment	Cr.		4,370

30-Jun	Depreciation Expense - Automobile	Dr.	6,521
	To Acc. Depreciation - Automobile	Cr.		6,521

30-Jun	Revenue	Dr.	9,250
	To Unearned Revenue	Cr.		9,250

The Trial balance post all the adjustments has been shown below:

Paul services Trial Balance As At 30 June 2016
Acc No	Account Name	Unadjusted		Adjustments		Adjusted
Acc No	Account Name	Debit	Credit	Debit	Credit	Debit	Credit
101	Cash at Bank	48,100				48,100
105	Accounts Receivable	16,030				16,030
115	Supplies	1,480				1,480
120	Prepaid Insurance	2,960			2,368	592
135	Office Furniture	37,000				37,000
137	Acc. Depreciation. - Furniture		-		2,219		2,219
140	Office Equipment	74,000				74,000
141	Acc. Depreciation - Equipment		-		5,370		5,370
145	Store Equipment	111,000				111,000
146	Acc. Depreciation - Equipment		-		4,370		4,370
170	Automobile	148,000				148,000
171	Acc. Depreciation - Automobile		-		6,521		6,521
201	Accounts Payable		32,060				32,060
201	Interest Payable		48,090		14,800		62,890
201	Unearned revenue		18,500		9,250		27,750
201	Loan Payable		7,400				7,400
201	Mortgage Payable		148,000				148,000
201	Paul's Capital		48,898				48,898
201	Paul's Drawings	148				148
201	Revenue		148,000	9,250			138,750
201	Advertising Expense	1,000				1,000
201	Automobile Expense	5,775				5,775
201	Depreciation Expense - Furniture	-		2,219		2,219
201	Depreciation Expense - Equipment	-		5,370		5,370
201	Depreciation Expense - Store Equipment	-		4,370		4,370
201	Depreciation Expense - Automobile	-		6,521		6,521
201	Insurance Expense	800		2,368		3,168
201	Maintenance Expense	3,500				3,500
201	Miscellaneous Expense	1,155				1,155
201	Rent Expense	-				-
201	Supplies Expense	-				-
201	Utilities Expense	-				-
201	Interest Expense	-		14,800		14,800
Total		450,948	450,948	44,897	44,897	484,227	484,227

Below shown is the income statement for the company for the year ended 30^thJune 2016:

Paul Services
Income Statement
For the period ended 30th June 2016
Particulars	Amt ($)	Amt ($)
Revenue		138,750
Less: Expenses
Advertising Expense	1,000
Automobile Expense	5,775
Depreciation Expense - Furniture	2,219
Depreciation Expense - Equipment	5,370
Depreciation Expense - Store Equipment	4,370
Depreciation Expense - Automobile	6,521
Insurance Expense	3,168
Maintenance Expense	3,500
Miscellaneous Expense	1,155
Supplies Expense	1,110
Interest Expense	14,800	48,987
Net Profit		89,763

The journal entries at the time of closing of the books of accounts are mentioned below:

Paul Services
Closing Journal Entries
Date	Particulars	Dr./Cr.	Amt	Amt
30-Jun	Revenue Account	Dr.	138,750
	To Profit and Loss Account	Cr.		138,750

30-Jun	Profit and Loss Account	Dr.	48,987
	To Advertising Expense	Cr.		1,000
	To Automobile Expense	Cr.		5,775
	To Depreciation Expense - Furniture	Cr.		2,219
	To Depreciation Expense - Equipment	Cr.		5,370
	To Depreciation Expense - Store Equipment	Cr.		4,370
	To Depreciation Expense - Automobile	Cr.		6,521
	To Insurance Expense	Cr.		3,168
	To Maintenance Expense	Cr.		3,500
	To Miscellaneous Expense	Cr.		1,155
	To Supplies Expense	Cr.		1,110
	To Interest Expense	Cr.		14,800

30-Jun	Profit and Loss Account	Dr.	89,763
	To Retained Earnings	Cr.		89,763

Below shown is theproftand loss account and the statement of changes in equity for the period 30^thJune 2016[ CITATION Fay17 \l 1033 ].

Paul Services
Balance Sheet
as on 30th June 2016
Particulars	Amt ($)	Amt ($)
Assets		-
Non Current Assets
Office Furniture	37,000
Acc. Depreciation. - Furniture	(2,219)
Office Equipment	74,000
Acc. Depreciation - Equipment	(5,370)
Store Equipment	111,000
Acc. Depreciation - Equipment	(4,370)
Automobile	148,000
Acc. Depreciation - Automobile	(6,521)	351,521

Current Assets
Cash at Bank	48,100
Accounts Receivable	16,030
Supplies	370
Prepaid Insurance	592	65,092
Total Assets		416,613

Equity & Liabilities
Non Current Liabilities
Loan Payable	7,400
Mortgage Payable	148,000	155,400

Current Liabilities
Accounts Payable	32,060
Interest Payable	62,890
Unearned revenue	27,750	122,700

Equity
Paul's Capital	48,898
Paul's Drawings	(148)
Proft for the year	89,763	138,513
Total Equity and Liabilities		416,613

Paul Services
Statement of Changes in Equity
As on 30th June 2016
Particulars	Amt ($)	Amt ($)
Equity
Paul's Capital	48,898
Less: Paul's Drawings	(148)
Add: Profit for the year	89,763	138,513

Total Equity at the end of year		138,513

Discussion on the requirements of internal reports

Trial Balance

A trial balance is the list of all the ledger accounts with the debit and credit balances listed alongside. It is prepared to check the arithmetical accuracy of the accounting being done throughout the year and in case the debit and the credit balances are not matching, it indicates that there is an error in accounting and the same needs to be revised. It is a prerequisite to the financial planning statement preparation and helps in the final closing of the books of accounts[ CITATION Vis17 \l 1033 ].

Adjustment Journal Entries

Adjustment journal entries are being passed to accommodate for the accounting, compensating or period errors, which might have occurred in the books of accounts, during the normal accounting, cycle[ CITATION Kuh16 \l 1033 ]. The types of errors, which may be included here, are like prepaid expenses, which might have been paid earlier during the year, but then the adjustment is being done now or the depreciation has not been posted for the different assets and the same is being done now. The common types of transactions include accrual of incomes or accounting for outstanding liabilities or prepaid incomes[ CITATION Lin17 \l 1033 ]. For a business, there are always a few transactions, which may start in a given year, but the same is not completed in current year and may just be carried to New Year. There comes the need of the adjustment entries in the books.

Adjusted Trial balance

Adjusted Trial balance is the final trial balance based on which the financial statements are being prepared[ CITATION Sit17 \l 1033 ]. It is the trial balance post adjustment of all the adjusting entries. It shows the debit and credit balances of all the accounts reconciled and thereby helping in the preparation of financial statements. It is always an internal document of the company and reported nowhere in the annual report, however, the financial statements including balance sheet, profit and loss account and equity statement is prepared based on this[ CITATION Fél17 \l 1033 ].

Closing Journal Entries

Closing journal entries are the ones, which are passed post the final trial balance is ready and are very different from the adjusting journal entries[ CITATION Boc16 \l 1033 ]. These are passed to transfer the balances from the temporary accounts to the permanent accounts, thereby making them zero. Temporary accounts are nothing but the income statement accounts whereas the permanent accounts are the balance sheet accounts that are being carried forward to the next year[ CITATION Das17 \l 1033 ].

References

1. Boccia, F. & Leonardi, R., 2016. The Challenge of the Digital Economy: Markets, Taxation and Appropriate Economic Models.s.l.:Springer.
2. Das, P., 2017. Financing Pattern and Utilization of Fixed Assets - A Study. Asian Journal of Social Science Studies,2(2), pp. 10-17.
3. Fay, R. & Negangard, E., 2017. Manual journal entry testing : Data analytics and the risk of fraud. Journal of Accounting Education,Volume 38, pp. 37-49.
4. Félix, M., 2017. A study on the expected impact of IFRS 17 on the transparency of financial statements of insurance companies. MASTER THESIS,pp. 1-69.
5. Kuhn, J. & Morris, B., 2016. IT internal control weaknesses and the market value of firms. Journal of Enterprise Information Management,30(6).
6. Linden, B. & Freeman, R., 2017. Profit and Other Values: Thick Evaluation in Decision Making. Business Ethics Quarterly,27(3), pp. 353-379.
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