ACCG1000

ACCOUNTING IN SOCIETY

Interactive
Assignment
Information pack
Session 1 2020

Updated Version for Online Delivery

30 March 2020

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 Interactive Assignment

Introduction
The interactive assignment is designed to provide introductory accounting students with an
overview of the practical skills essential to financial accounting, through the completion of a
one month accounting cycle for a fictional business. This interactive assignment will expose
you to the accounting transactions (both external and internal) in business, and the accounts
used in the General Journals and General Ledger.

To assist with understanding the accounting cycle and the information given, this interactive
assignment is intended to be completed under the guidance of your tutor. The interactive
assignment consists of NINE weeks’ work from Week 4 to Week 12, which is worth 10% of
your overall grade in ACCG1000.

Introduction to the fictional business (FlixCity) is provided at the end of this information pack.
From Week 4 to Week 12, additional information about the business along with the task
requirements will be provided on iLearn. Discussion forums/online live chat/zoom sessions
will be open on iLearn each week to seek advice and guidance from your tutor on completing
the task requirements. Additionally, a pre-recorded short video will be available on iLearn
each week that further explains the requirements of the assignment. The interactive
assignment is undertaken in Excel. Thus, you are required to have an ELECTRONIC DEVICE
(i.e. laptop or tablet) with you from Week 4 to Week 12 which enables you to undertake and
save your work in Excel.

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Weekly schedule breakdown (things to do in each of the following weeks)
Week 3
- Read this information pack carefully to understand the requirements and the business
background of FlixCity.
- Download the Excel file ‘Assignment Worksheets’ from iLearn under the assessment
section.
- Save the file to your electronic device and name it with your student name followed
by your student number.

Week 4 to Week 12
- Download additional information and task requirements from iLearn at the scheduled
dates provided below.
- Undertake task requirements as guided by your tutor via discussion forums/online
live chat/zoom sessions.
- Save your work on your electronic device.
- Continue to complete the task requirements in your own time. Note that it is your
responsibility to complete and correct your answers. You cannot proceed to the next
task requirements until the current task is completed correctly.

Week Task requirements Additional Due date

information to be
released
Updated assignment Wednesday, 25 March Students will
information pack submit their
releases on iLearn work via iLearn
4 Set up T-accounts Sunday, 29 March in Week 8 (5%).
5-6 Record transactions Sunday, 5 April
7 Adjusting entries Sunday, 19 April

8 Submit your work via iLearn

9 Closing entries, Worksheet Sunday, 3 May Students will
submit their
10 - 11 Prepare financial statements Sunday, 10 May work via iLearn
12 Submit your work via iLearn in Week 12
(5%).

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Criteria and standards

All markings will be undertaken online. Your work will be marked twice (Week 8 and Week 12) during the assignment period and it is 5% each. For both
markings, your mark will be determined using the following marking rubric:

Not attempted Fail Pass Credit Distinction High Distinction

Completeness Not attempted, or less than 30% - 50% of the required ≥ 50% of the required tasks ≥ 70% of the required tasks ≥ 80% of the required tasks ALL the required tasks have
30% of the required tasks tasks have been attempted. have been attempted. have been attempted. have been attempted. been attempted
have been attempted, or
entirely/significantly
plagiarized from other
sources.

3 marks 0 marks 1 mark 1.5 marks 2 marks 2.5 marks 3 marks

Correctness Not attempted or
entirely/significantly
plagiarized from other
sources.
Numerous errors. The
understanding of the key
concepts needs to be
improved. The narrations in
the general entries/ the
presentation format of the
financial statements are not
correct.
Some errors,
demonstrating fair
understanding of the key
concepts. The narrations in
the general entries/ the
presentation format of the
financial statements are
fairly correct.
Occasional errors,
demonstrating reasonable
understanding of the key
concepts. The narrations in
the general entries/ the
presentation format of the
financial statements are
reasonably correct.
No/ few errors,
demonstrating great
understanding of the key
concepts. The narrations in
the general entries/ the
presentation format of the
financial statements are
mostly correct.
No/few errors,
demonstrating excellent
understanding of the key
concepts. The narrations in
the general entries/ the
presentation format of the
financial statements are
precise.

2 marks 0 marks 0.5 marks 1 mark 1.5 marks 1.8 marks 2 marks

Note: To receive full marks (3 marks) for completeness in Week 12, the student must complete all the task requirements assigned from Week 4 to Week 12.

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Submission

It is only possible for you to submit your work via iLearn. No work must be submitted via
emails. If you do not submit online by due date, the marks for that week’s work will be
forfeited.

Extensions and penalties

No extensions will be granted. Students who have not submitted the task prior to the deadline
will be awarded a mark of 0 for the task (i.e. 0 marks for each week’s task requirements),
except for cases in which an application for Special Consideration is made and approved.

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Business background

The Origins of FlixCity

Nicholas Robbins is your typical example of an Australian Gen
Y’er. He completed his HSC, went on to study media at university
and graduated in 2010 with a Bachelor in Media Studies. Sadly,
whilst he was completing his final year, Nicholas’ grandfather
passed away, bequeathing him an unused warehouse premises located in the commercial
district not far from where the family lived in the southern suburbs of Sydney.

Once his exams were over, Nicholas set about converting the warehouse space into a venue
for family and friends to gather, watch movies and play online games. Over the next couple
of months, he spent his weekends driving around Sydney, looking for lounges and furniture
that people were disposing of in council roadside collections to fit out his venue. Amongst
other things, he was able to scavenge unwanted widescreen TVs, desks, DVD players and
computer equipment. By February of 2011, Nicholas had created a recreational space that
family and friends could enjoy together.

As time went by, Nicholas found increasingly, that his “space” was in serious demand –
Jeannie, his Mum had a regular booking on a Wednesday, where she invited her friends for
lunch and a movie; most Saturday evenings, Nicholas’ brother, Patrick hosted gaming
tournaments with his mates, who all brought their own gaming equipment; his sister, Annie
used the space regularly for movie nights with her friends; and Nicholas’ Dad, James, had
reserved Friday nights for watching the “footy” with his buddies. The rest of the week was
often booked out by other family and friends for functions ranging from social get-togethers,
to birthday parties, and even the occasional bucks’ night.

By April 2011, Nicholas secured a full-time position with a media organisation, but continued
to keep his space operating for himself, his family and friends. News spread about Nicholas’
space, mainly by word of mouth to friends of friends in the beginning and then via Facebook
as well as other social media. By 2013, he found that he could start charging enough for the
service he was providing to cover the electricity and other ongoing expenses, plus make a
modest profit for himself.

It wasn’t until around February of 2015, it occurred to Nicholas that this space could actually
grow into a viable business for him. Whilst he was able to charge a small mark-up on his costs,
he now recognised that with the increasing demand for the space, there was real money to
be made by promoting it to the general public. By using his knowledge of, and contacts within
local media outlets through his work, Nicholas believed he could successfully promote his
unique service to the wider community.

His idea was to create a mini-cinema (seating around 60 people) and a gaming precinct. Over
the following few months, Nicholas’ spare time was consumed with looking into the possibility
of purchasing or leasing new computer equipment, gaming consoles, lounges, and furniture.

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With Patrick’s help, he researched the latest and most popular games, and investigated the
costs involved in buying commercial licenses for those they determined would attract the
most interest from the local gaming community. Nicholas also investigated the costs involved
in either leasing or buying cinema seating, a projector, and a theatre screen.

Nicholas and his Dad, James, looked into the costs involved in dividing the warehouse into
three main areas:

o One to be fitted-out with 60 comfortable chairs, a professional theatre

projector and a screen that spanned the entire width of the warehouse;
o A second smaller area to be fitted-out with gaming chairs and equipment, a
hi-speed internet connection and network; and
o A third space to be set up as a small foyer with a “candy bar”, designed to
retail an array of other snacks and confectionary, which would include
popcorn machines, soft serve ice-cream and soft drink dispensers.

They talked to a friend of James’ who was an architect, to get an idea of the costs involved
with such a proposal and to determine whether it would be at all feasible. Neither Nicholas
nor any of his family had any experience with “money matters”, so they relied on the advice
of their architect friend and ultimately their family’s Bank Manager, who both seemed
genuinely excited by the proposal. After a loan was eventually approved by the
Commonwealth Bank (CBA), with James agreeing to be a guarantor, Nicholas set about
converting the warehouse into his new and exciting enterprise. He needed a name for the
signage and promotional materials, so after much discussion and consideration, decided upon
FlixCity & Gaming. He played around with the name and some graphics and created a logo
that he could use on signage, equipment, promotional materials and pretty much anything
that had to do with his new commercial enterprise.

The final fit out involved installing soundproofing between the theatre and gaming space, and
blackout curtaining on all windows and doors. By July 1 of 2015, FlixCity and Gaming opened
its doors to the public. Nicholas was still employed full-time with the media organisation, so
he left the day-to-day running of FlixCity to James and Jeannie, who were both semi-retired
and had time to devote to the enterprise. For their involvement, Nicholas paid his parents a
modest salary once the revenue began to flow in.

Fast-forward to today, the three businesses Nicholas is running from his warehouse all appear
to be running successfully and delivering healthy incomes. FlixCity and Gaming now employs
6 part-time staff (four of whom are Nicholas’ family members) and operates five and a half
days per week. The CBA loan was being paid down each month, so his bank manager was
reasonably happy and left him alone. All was progressing smoothly for Nicholas and his
business, or so he thought.

At the end of the 2016 financial year, according to the accountant Nicholas engaged, the
enterprise produced the grand profit of $129.67. When presented with this information,
Nicholas was perplexed. Whilst he acknowledged that cash flow always seemed to be a
problem for FlixCity & Gaming, their bank account was never overdrawn and they always met
their financial obligations. Demand for the gaming business outweighed their ability to supply
– there were long waiting lists for bookings on weekends in particular. Furthermore, most
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weekends the cinema operated at between 70% to 80% capacity, which for a small,
independent cinema was impressive. Also, to minimise cash outflows, Nicholas only buys a
small amount of confectionary and popcorn for the candy bar every time. Given their low
value, Nicholas was advised by the accountant to expense the costs as incurred. After
reviewing the sales revenue and outgoing costs of each of the businesses, Nicholas thought
they were producing more than $1, 000 in profits, so this modest profit figure made
absolutely no sense to him. In fact, he suspected that the exorbitant fees he was paying this
accountant were the major reason for this depleted profitability!!

Once the 2016 tax return had been lodged and the CBA saw his financial statements, the Bank
Manager called Nicholas and James in for a meeting to “discuss” the way forward. The bank
was concerned about Nicholas’ poorly managed cash flow and how this would impact his
future ability to service the loan extended to FlixCity. The Bank Manager was now demanding
to see monthly financial statements from Nicholas to assure the CBA that the business would
remain profitable into the future and would be able to meet their ongoing loan repayment
obligations. This new requirement from the bank would mean significantly more expenditure
on accounting fees, which, Nicholas believed, would further impact his cash flow problems.

It was time to take matters into his own hands. Nicholas enrolled himself in a basic accounting
course that was run over 4 weekends with the view to establishing his own accounting system
for FlixCity & Gaming. When he returned from the final class, Nicholas began setting up the
accounts, so he could meet his new monthly reporting obligations to the CBA.

Next week we will work through the procedure Nicholas undertakes to set up his new
accounting system.

The End