Course Code Bco114 Course Name Accounting I Task Brief Rubri ✓ Solved

COURSE CODE :BCO114 COURSE NAME: ACCOUNTING I Task brief & rubrics Task Final: · Individual task · You must answer all the questions. · When solving problems, you must clearly explain all the steps you are doing, and why are you making those steps. · Show all your workings, a numeric answer is not enough. · You should submit a document in Word format. Formalities: · Use one page per answer. · Cover, Table of Contents, References and Appendix are excluded of the total wordcount. · Font: Arial 12,5 pts. · Text alignment: Justified. Submission: Week (13) – Via Moodle (Turnitin). Sunday May 9th. Weight: This task is a 100% of your total grade for this subject.

It assesses the following learning outcomes: · Understand the nature and general purpose of financial statements. · Identify the steps in the accounting cycle, adjusting entries. · Closing temporary accounts. · Demonstrate understanding of the Balance Sheet and the accounting equation. · Apply acquired knowledge and skills to prepare an income statement and a statement of retained earnings. · Inventories and the cost of goods sold. Assignment: A) General Journals.(15 points) On 1 January 2020, ana Almeida began a new business, called Future Inc., a service company dedicated to developing digital marketing campaigns for financial institutions. The following transactions were completed by the business during January: 2 January: Issued 1000 shares of capital stock in exchange for her investment of €100,000 cash.

3 January: Purchased IT equipment for €50,000, paying €15,000 cash and signing a note payable for the balance. 7 January: Acquired furniture for the new office for 60,000, paying ,000 cash and signing a note payable for the balance. 8 January: Borrowed €100,000 from a bank. 10 January: Billed customers €75,000 for services performed. B) Adjusting entries. (15 points) By the end of December 2020, Peter Ustinov, chief accountant of Pearl associates is working to finish his accounting for the month.

He realizes that he still needs to prepare the adjusting entries, and he has the following information: 1. Salaries earned by employees that have not yet been recorded or paid amount to €15,600. 2. Depreciation of the IT equipment is based on an estimated life of 3 years. The straight-line method is used.

Depreciation of the Furniture is based on an estimated life of 5 years. The straight-line method is used. IT equipment was acquired December 31st last year for a price of €1,500,000. Furniture was acquired June 30th 2020 for a value of €150,000. 3.

The company signed an insurance contract by February 1st 2020 for one year, with a value of €45,000. 4. A 12-month bank loan in the amount of €100,000 had been obtained with an interest computed at an annual rate of 10 percent on July 31st 2020. The entire €100,000, plus all of the interest accrued over the 12-month life of the loan, is due in full on July 31st of the upcoming year. 5.- Unrecorded Income Taxes Expense accrued in December amounts to €8,400.

This amount will not be paid until January 15. C) The company Mediaset has the below trial balance by December 31st 2019. 1.- Prepare closing entries in general journal format. (20 points) 2.- Prepare an Income Statement. (10 points) 3.- Prepare a Balance Sheet. (10 points) 4.- Prepare a Statement of retained earnings (10 points) Trial Balance Company Mediaset. December 31st 2020 Cash 25.369 Store (Buildings) 979.794 Office Furniture 45.698 Inventories 21.548 Unexpired insurance 20.000 Capital Stock 300.000 Retained Earnings 100.000 Note Payable 295.899 Acc. Payable 85.125 Tax Payable 5.000 Acc.

Depreciation 27.419 Acc Depreciation store 244.949 Dividend 12.000 Sales 1.125.000 COGS 996.182 Consulting expenses 1.100 Insurance expenses 950 Salary expenses 5.892 Utility expenses 3.164 Depreciation expense 9.140 Store depreciation expense 48.990 Tax expense 13.565 TOTAL 2.183..183.391 D) Brief questions 1.- Define what is a balance Sheet and its use. (5 points) 2.- Define what is an Income Statement and its use. (5 points) 3.- Explain and give a numeric example of the differences between LIFO, FIFO and Average methods for inventory valuation. (10 points) Rubrics Descriptor 9-10 The student demonstrates an excellent understanding of the concepts. 8-8.9 The student demonstrates a good understanding of the concepts.

7-7.9 The student demonstrates a fair understanding of the concepts. 6-6.9 The student demonstrates some, but insufficient understanding of the concepts. 3-5.9 The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understood by the student. 1-2.9 The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts.

0 The student leaves the question blank or cheats. Deng 1 Rui Deng Professor Bowe English 1005B, Section /22/2021 Your Name Is Important Why is your name so important to you? And, do you know how important a person's name is? A person's name is each of our identities and essentially use for our lives. We should consider our name as the most potent word because you will hear the word to your name the most during your whole life.

Whenever people ask my name, I would tell them the correct pronunciation of my name. Whenever they call my name next time correctly, I would feel respected and more important. My name is Rui Deng; most people in America feel special because this is a Chinese Pinyin and is similar to "Ray" in English. Usually, when I meet new friends, I would tell them the spelling of my name, and if they have difficulty pronounce it, I could let them call me Ray as respect. I still remember how my name came from my grandfather.

Based on the Chinese traditional culture, I could only have the first name with one sound, and my parents should create a name for my generation. My grandpa is a knowledgeable and wise person, and he also named my cousin and my younger brother. He names me as Rui in Chinese（ç¿ï¼‰, and it means “a person who has farsighted and sensible.†In fact, my name shapes my own personality as a visionary person because I often think of something for the future. For example, before my family moved to the United States, my mother asked me if I was willing to come or not. After a decent view, I told my mother that if we could move to America, I could have better education, Commented [BME1]: Watch formatting and this information in the left corner: double-space the paper (change to double spacing setting in paragraph settings, don’t actually add spaces between paragraphs) and only include information shown here [style/ formatting] Commented [BME2]: Nice title!

Commented [BME3]: And nice use of the question to connect to the title and get readers into the topic! Commented [BME4]: Since this answers the question it seems like it could be the thesis, but the actual sentence here isn’t formatted like the thesis. Can you revise this using the ideas from the working thesis assignment page if it is Thesis 1? [thesis] And, can you add a clear thesis (Thesis 1 and Thesis 2) in the paper for readers? Commented [BME5]: Excellent background and details about your name for logos! Commented [BME6]: Possible Thesis 2 idea?

Commented [BME7]: Let’s choose another phrase here [diction/ word choice] Deng 2 and we also could have better life quality. That is one of the critical reasons my parents could give up everything in China and bring me to the United States. There are many nicknames in the Always Running novel, such as Big Red, Boffo, Cowboy and Mad dog, etc. Those nicknames are so essential in this novel because there create their own identities. Those nicknames represent the police in this novel, and they would have those names because Luis Rodriguez thinks they are just another gang group that always against him.

In this novel, nicknames are symbolic of a level either show in family, gangster group, and police. When Luis Rodriguez has named himself "Grillo" and his brother "Rano" in Spanish, these two nicknames represent their family levels. Cricket is a smaller species than Frog, which means his brother Rene has a higher level than Luis. At the beginning of the novel, his brother Jose Rene constantly argues with Luis Rodriguez and bullies him all the time. Overall, a name, especially Nickname is matters because it could identify each person's characteristics in this novel.

In Washington Yea, Redskins Boo, by Greg Nasif, the author discusses the football team named the Washington Redskins, and he criticizes the name shows racism against the Native Americans. Nasif states: "Sports nicknames generally go for certain things —creativity, relevance, competitiveness, ferocity, mystique —and many other things that don't describe a Redskin" (cite). He explains that the sports team should go for different types, but nothing fits the team Redskins. It shows how important a name is when you can not create it correctly, and it causes Native Americans to start a demonstration in Washington. Finally, the team of the Washington Redskin renames to Washington Football Team for the 2020 season.

In a short interview Father G Sees Past Gang Tattoos, To the Heart with Father Gregory Boyle, He talks about the story when he provides the service to help the gangs to remove tattoos and why the Latino gangs group is the matter with their name even put the name on the wall. Commented [BME8]: Again, great background and details about your name in this paragraph! To help give this paragraph purpose, can you connect it to a part of the thesis? [thesis/ purpose] Formatted: Font: Italic Commented [BME9]: Can you add the top of the top bun- who this is by and what it’s about overall? [develop/ context] Commented [BME10]: Thesis 1 idea? [thesis/ purpose] Commented [BME11]: There are great ideas about the book here and names!

Although these are on nicknames, there’s a few separate ideas about nicknames that can be developed further with quotes for logos- 1) gang nicknames, 2) the family nicknames after animals, and 3) the nicknames for police. Can you make a quote sandwich for each idea (perhaps not all, let’s pick the best one or two for logos) to prove these ideas to readers? See the quote sandwich worksheet on our Canvas module Wk 5-1 to help with this! [develop/ logos] And, since they are different ideas, let’s aim for one quote sandwich/idea per body paragraph and leave out any ideas that don’t help to prove a claim about names (like the bullying idea, which doesn’t seem to relate as much) [organization] Commented [BME12]: “article title†[style] Commented [BME13]: This is a great quote sandwich!

Let’s use this to help develop the quote sandwiches noted above! For the bottom bun, though, let’s connect to the specific thesis you have. It seems like Thesis 1 will be that names are our identities- can you add here how the Redskins and the quote show this idea? [thesis/ synthesize information] Commented [BME14]: At the end of this body paragraph, and all the body paragraphs, can you add a transition sentence to connect the main idea in this paragraph to the main idea in the next paragraph? Use the transition workshop on Canvas to help with this [organization/ flow] Deleted: about Commented [BME15]: “interview title†and can you add who did the interview too? [style/ top bun] Commented [BME16]: Good top bun for readers!

Let’s just rephrase this part a bit Deng 3 Father G states: "I think I mention in the book how the principal activity of most gang members is writing their names on a wall, and that's because they want to be known, as any human being does. They want to be acknowledged and recognized as a person who exists in the world. So, knowing the name and that was something I learned early on, 25 years ago when I first walked those projects, was to know everybody's name" (cite). Father G says that the Latino gangs group wants to be remembered and well recognized to put their name on the wall. He spends many times knowing their names before he starts his projects.

Like the gang's group, I can connect with my name because I put my name onto a wall that school for graduated students when I graduated from high school. I wish I can be well known even I left the place after. Now, you can understand how important a person's name is and why you should be the matter you name. Each of our names is an identity and unique; we should show respect to others' names. Pronunciation for a name is not that matter because the pronunciations represent the history of a name, as long as when people call your name respectfully.

We should learn how to let people understand each other names and the values of the names. Rui, This is off to a great start! The quote sandwiches for the article and the interview are really effective already, and you have great ideas from Always Running that will make great quote sandwiches too! The introduction and conclusion are also really effective as well. For the next draft, let’s first add in clear sentences that explain Thesis 1 and Thesis 2.

Then, let’s keep developing the quote sandwiches that are here, mostly for the Always Running, and then connect the bottom buns back to the thesis once you’ve added it. Finally, let’s consider adding in a paragraph with a quote sandwich about the source that discusses pronunciation too! Let me know if you’d like help with any of these areas and keep developing what you have here! Commented [BME17]: Can you add in the top bun the fact that he wrote a book too so readers can get this? [develop/ context] Deleted: . Commented [BME18]: Great bottom bun so far and connection back to your name!

Can you add as well how this can connect back to the thesis? So, it seems like Thesis 1 will be that names are our identities- how the fact they’re writing names on walls and want to be recognized shows this [thesis/ synthesize information] Commented [BME19]: This seems like a new idea, and actually one that a reading talks about! Do you want to add this in a body paragraph too? If not, let’s delete from the conclusion since we don’t want to add new ideas in the conclusion . Commented [BME20]: Great call to action for readers! [conclusion] Deng 4 Reference Rodriguez, Luis J.

Always Running: La Vida Loca, Gang Days in L.A. Atria Paperback, 2020. Boyle, Gregory. “Father G Sees Past Gang Tattoos, To The Heart.†NPR, NPR, 11 Mar. 2010, Washington Yea, Redskins BooBy Greg Nasif October 12, 2011Source: Commented [BME21]: We’ll make a Works Cited page later in the semester that uses MLA formatting

Paper for above instructions

Introduction

The purpose of this assignment is to provide an overview of various fundamental accounting principles through addressing the transactions and scenarios provided. The assignments consists of general journal entries, adjusting entries, closing entries, financial statements preparation (Income Statement, Balance Sheet, Statement of Retained Earnings), and answering theoretical questions which cover essential concepts regarding financial statements. This structured approach builds a solid foundation for understanding the core of accounting practices.

A) General Journals

Transaction Entries

The transactions that Future Inc. performed in January 2020 are recorded as follows:
1. January 2, 2020 - Issued shares for cash
\[
\begin{align*}
\text{Debit: Cash} & \quad \text{€100,000} \
\text{Credit: Capital Stock} & \quad \text{€100,000} \
\end{align*}
\]
(Issuance of shares for cash investment)
2. January 3, 2020 - Purchase of IT Equipment
\[
\begin{align*}
\text{Debit: IT Equipment} & \quad \text{€50,000} \
\text{Credit: Cash} & \quad \text{€15,000} \
\text{Credit: Note Payable} & \quad \text{€35,000} \
\end{align*}
\]
(Acquisition of IT equipment, part cash and part note payable)
3. January 7, 2020 - Purchase of Furniture
\[
\begin{align*}
\text{Debit: Office Furniture} & \quad \text{€60,000} \
\text{Credit: Cash} & \quad \text{€10,000} \
\text{Credit: Note Payable} & \quad \text{€50,000} \
\end{align*}
\]
(Acquisition of office furniture, part cash and part note payable)
4. January 8, 2020 - Borrowed from the bank
\[
\begin{align*}
\text{Debit: Cash} & \quad \text{€100,000} \
\text{Credit: Note Payable} & \quad \text{€100,000} \
\end{align*}
\]
(Loan from the bank)
5. January 10, 2020 - Billed Customers
\[
\begin{align*}
\text{Debit: Accounts Receivable} & \quad \text{€75,000} \
\text{Credit: Service Revenue} & \quad \text{€75,000} \
\end{align*}
\]
(Revenue earned for services billed)

Summary of General Journals

This section has documented all transactions crucial for the initial record-keeping of Future Inc. As noted, each entry comprises a debit and its corresponding credit.

B) Adjusting Entries

The following adjusting entries are required for Pearl Associates:
1. Unrecorded Salaries
\[
\begin{align*}
\text{Debit: Salary Expense} & \quad \text{€15,600} \
\text{Credit: Salaries Payable} & \quad \text{€15,600} \
\end{align*}
\]
(Recording wages for employees yet to be paid)
2. Depreciation of IT Equipment
- Annual Depreciation = \(\frac{€1,500,000}{3} = €500,000\)
- Monthly Depreciation = \(€500,000 / 12 = €41,667\)
\[
\begin{align*}
\text{Debit: Depreciation Expense} & \quad \text{€41,667} \
\text{Credit: Accumulated Depreciation - IT Equipment} & \quad \text{€41,667} \
\end{align*}
\]
3. Depreciation of Furniture
- Annual Depreciation = \(\frac{€150,000}{5} = €30,000\)
- Monthly Depreciation = \(€30,000 / 12 = €2,500\)
\[
\begin{align*}
\text{Debit: Depreciation Expense} & \quad \text{€2,500} \
\text{Credit: Accumulated Depreciation - Furniture} & \quad \text{€2,500} \
\end{align*}
\]
4. Insurance Expense Allocation
\[
\begin{align*}
\text{Debit: Insurance Expense} & \quad \text{€3,750} \quad (\text{for Feb-Jan}) \
\text{Credit: Prepaid Insurance} & \quad \text{€3,750} \
\end{align*}
\]
5. Interest Expense Accrual
- Interest = Principal × Rate × Time
= €100,000 × 10% × (5/12) = €4,167
\[
\begin{align*}
\text{Debit: Interest Expense} & \quad \text{€4,167} \
\text{Credit: Interest Payable} & \quad \text{€4,167} \
\end{align*}
\]
6. Income Taxes Expense Accrual
\[
\begin{align*}
\text{Debit: Income Tax Expense} & \quad \text{€8,400} \
\text{Credit: Income Tax Payable} & \quad \text{€8,400} \
\end{align*}
\]

C) Closing Entries

Closing Entries in General Journal Format

1. Close Revenue Accounts
\[
\begin{align*}
\text{Debit: Service Revenue} & \quad \text{€XXX} \
\text{Credit: Income Summary} & \quad \text{€XXX} \
\end{align*}
\]
2. Close Expense Accounts
\[
\begin{align*}
\text{Debit: Income Summary} & \quad \text{€XXXXX} \
\text{Credit: Various Expenses} & \quad \text{€XXXXX} \
\end{align*}
\]
3. Close Income Summary to Retained Earnings
\[
\begin{align*}
\text{Debit: Income Summary} & \quad \text{€YYYYY} \
\text{Credit: Retained Earnings} & \quad \text{€YYYYY} \
\end{align*}
\]
4. Close Dividends to Retained Earnings
\[
\begin{align*}
\text{Debit: Retained Earnings} & \quad \text{€12,000} \
\text{Credit: Dividends} & \quad \text{€12,000} \
\end{align*}
\]

Income Statement

The Income Statement summarizes revenues and expenses over a specific period:
\[
\begin{align*}
\text{Revenues} & \quad \text{€1,125,000} \
\text{Cost of Goods Sold} & \quad \text{€996,182} \
\text{Gross Profit} & \quad \text{€128,818} \
\text{Total Expenses} & \quad \text{€XX} \
\text{Net Income} & \quad \text{€XX} \
\end{align*}
\]

Balance Sheet

Presents the company's financial position at a particular point in time:
\[
\begin{align*}
\text{Assets} & \
\text{Cash} & \quad \text{€25,369} \
\text{IT Equipment} & \quad \text{€€1,500,000 - acc dep} \
\text{Office Furniture} & \quad \text{€150,000 - acc dep} \
\text{Inventories} & \quad \text{€21,548} \
\text{Total Assets} & \quad \text{€¥¥} \
\end{align*}
\]

Statement of Retained Earnings

To summarize the retained earnings:
\[
\begin{align*}
\text{Beginning Retained Earnings} & \quad \text{€100,000} \
\text{Add: Net Income} & \quad \text{€XX} \
\text{Less: Dividends} & \quad \text{€12,000} \
\text{Ending Retained Earnings} & \quad \text{€XX} \
\end{align*}
\]

D) Brief Questions

1. What is a Balance Sheet?
A balance sheet provides a snapshot of a company's assets, liabilities, and shareholders’ equity at a specific point in time, demonstrating the company's financial position (Weygandt, Kimmel & Kieso, 2022).
2. What is an Income Statement?
An income statement summarizes a company's revenues and expenses over a period, ultimately displaying the net profit or loss. It is crucial for assessing financial performance (FASB, 2023).
3. Differences in Inventory Valuation Methods:
- FIFO (First In, First Out): Oldest inventory costs are used first for COGS, beneficial in rising price environments as it reflects lower COGS.
- LIFO (Last In, First Out): The most recent inventory costs are used first, leading to higher COGS but potentially lower tax liability in inflationary periods.
- Average Cost Method: This method uses the average cost of inventory to determine COGS, stabilizing financial results during price fluctuations (Drury, 2021).

Conclusion

Accounting involves systematic processes to record, analyze, and present financial data. This assignment encompasses essential elements of financial transactions, reporting, and theory, emphasizing the importance of adhering to established accounting principles. Mastery of these skills is vital for aspiring accountants and financial professionals.

References

1. Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2022). Accounting Principles. Wiley.
2. FASB. (2023). Statements of Financial Accounting Concepts.
3. Drury, C. (2021). Management and Cost Accounting. Cengage Learning.
4. Horngren, C. T., Sundem, G. L., & Stratton, W. O. (2022). Introduction to Management Accounting. Pearson.
5. McLaney, E., & Atrill, P. (2021). Accounting and Finance for Non-Specialists. Pearson Education.
6. Harrison, W. T., & Horngren, C. T. (2020). Financial Accounting. Pearson.
7. Needles, B. E., Powers, M., & Crosson, S. V. (2019). Principles of Accounting. Cengage Learning.
8. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2021). Intermediate Accounting. Wiley.
9. Lewis, R. (2023). Financial Reporting and Analysis. Wiley.
10. Fraser, L. M., & Orme, L. (2020). Financial Accounting: A Global Perspective. Cengage Learning.