ACCT 2014 - Financial Accounting I

Group Project
Semester I 2020/2021

 To be completed in groups of 5 or 6 registered students.

 Groups can ONLY be formed with students registered to the same stream

 Project MUST be submitted in Excel Template provided by the lecturer. This template

cannot be edited in anyway other than what is instructed

 All Projects MUST be submitted with grading rubric (provided by the lecturer)

completed by all group members

Deadline – November 20, 2020 11:59pm

1
The following are summaries of the cash book and bank accounts of Patsy Knight, a sole
proprietor, who does not keep her books using the double entry system.

Bank Summary
$ $
Balance on 1 January 2018 60,000
Receipts:
Receivables 350,000
Cash bank 22,200 372,200
432,200
Payments:
Trade payables 310,000
Rent 10,100
Machinery 30,400
Wages 90,200
Insurance 8,050
Customers (dishonoured cheque) 800
Loan interest 950 (450,500)
Balance on December 2018 (18,300)

Cash Summary
$ $
Balance on 1 January 2018 10,000
Receipts:
Cash sales 90,700
Receivables 10,100 100,800
110,800
Payments:
Drawings 60,600
Repairs 10,400
Electricity 5,070
Cash banked 22,200 (98,270)
Balance on December 2018 12,530

The following referred to 2018 $

Bad debts written off 2,040

Goods withdrawn by Patsy Knight for own use 10,200
Credit note issued by Patsy Knight 6,040
Discounts allowed by trade suppliers 4,040
Discounts allowed to trade customers 8,000
Goods returned to trade suppliers 6,900

2
Further checks revealed the following during 2018:

 During the financial year a trade debt of $10,200 owed by Linda Grayson was off set
against the $20,000 owing to the same Linda Grayson a trade creditor.
 In addition to the goods returned above, Jane Hutton, a cash sales customer returned
goods during the financial year amounting to $7,000. Jane Hutton was repaid her
$7,000 from the daily cash sales. This was not yet reflected in the business records.
 Patsy Knight grants a credit period of 30 days to customers. The closing trade
receivables’ balance includes a debt of $8,000 from Favela Brown. The goods were
sold to Favela in November 2017. Favela went to the United States of America for a
two (2) weeks’ vacation in February 2018. On December 31, 2018 Favela was still in
the USA.
 Patsy Knight keeps a cash float of $10,000 for change in his retail outlet. Excess cash
is deposited in the bank account and cash shortfall is taken from the bank.
 The accounting fee for preparing the 2018 financial statements is estimated at
$45,000.

The following additional information is also available:

1 January 31 December
2018 2018
$ $
Inventories 8,300 9,400
Machinery 19,800 40,400
Rent paid in advanced - 1,000
Rent outstanding 1,050 -
Trade receivables 18,100 19,200
Trade payables 15,700 14,800
Loan from bank at 10% 17,000 17,000
Loan interest owing - 750
Required:

a) Prepare a statement of affair to show Patsy Knight’s capital on 1 January 2018.

b) Prepare the Trade receivables Control Account
c) Prepare the Trade payables Control Account
d) Extract a trial balance as at December 31, 2018.
e) Prepare the Income Statement for the year ended 31 December, 2018
f) Statement of changes in owner’s equity for the year ended 31 December, 2018.
g) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2018.
h) Prepare a Statement of Cash Flow for the year ended 31 December, 2018