Darcy Smith has recently commenced trading as DS Gardening, a sole proprietorship. He had worked in the gardening and landscaping trade for several years, but wanted to start his own business seeking better - Custom Essay Writing Services for Students Worldwide

Advertising

Prepaid Advertising

Balance

ACC/ACF 1100

Introduction to Financial Accounting

Assignment One

In this assessment, you must NOT use generative artificial intelligence (AI) to generate any materials or content in relation to the assessment task.

Due Date:Sunday 13^thApril 2025 at 11:55pm (week 6)

Value:16%

Purpose:To demonstrate your understanding of the effect of transactions and events on the financial statements

Submission:uploaded via Moodle

Components:A practical (recording keeping) component, and a written response.You must use the word templates provided on Moodle.

Requirements:Please read the details carefully.There are two separate tasks involv____________________

Background and details:

Darcy Smith has recently commenced trading as DS Gardening, a sole proprietorship. He had worked in the gardening and landscaping trade for several years, but wanted to start his own business seeking better work-life balance. Details about his activities relating to gardening and lawn mowing for the month of January 2025 are provided (ignore GST):

Date	Details
1 Jan	Darcy contributed $1,300 cash, a $900 mobile phone, gardening equipment with a current market value of $1,800, and a vehicle valued at $8,600.
2 Jan	Darcy paid $440 for advertising that would cover the two months of January and February.
4 Jan	Darcy completed lawn mowing services for clients and received $160 cash. He disposed of the garden waste at the local transfer station for $25 cash.
5 Jan	Darcy purchased a quantity of fuel and oil for his gardening equipment for $90 cash. It was stored in his shed at home and used as required.
9 Jan	Darcy completed gardening work for a regular client. Nobody was home at the time so he left an invoice for $170 in the letterbox.
10 Jan	A second-hand trailer was purchased by Darcy for $2,660 on credit terms n/60. This would enable him to work more efficiently, making fewer trips to dispose of garden waste.
11 Jan	Darcy performed lawn mowing for $110, and gardening for $155, receiving both amounts in cash. He also disposed of garden waste for $85 cash.
12 Jan	Darcy withdrew $100 from the business bank account for personal use.
15 Jan	Darcy mowed several lawns throughout the day, collecting a total of $410 in cash.
18 Jan	Darcy purchased fuel and oil in cash for $140.
19 Jan	$170 cash was received by bank transfer from the gardening client whose invoice was dated 9 Jan.
20 Jan	Darcy paid $800 to creditors as an instalment on the trailer purchased.
22 Jan	Darcy completed an extensive gardening project for $520 cash. Garden waste disposal fees were paid for $120.
25 Jan	Darcy performed lawn mowing and received $205 cash, and gardening services for $125 on credit (an invoice was left for the client).
26 Jan	A regular client paid Darcy $280 to mow their lawn for the next four weeks as they would be away on holidays.
28 Jan	Darcy withdrew $250 from the business bank account for personal use.
31 Jan	Information regarding end-of-month adjustments: oDarcy mowed the regular clients lawn (the client who had already paid). He estimated that he would mow the lawn three more times while they are away. oDarcy estimates that he has $30 worth of fuel and oil on hand. o75% of the advertising has been consumed. Depreciation details (all straight-line method): oPhone (Life = one year, $0 residual) oGardening equipment (Life = 3 years, $0 residual) oVehicle (Life = 5 years, $2,600 residual) oTrailer (Life = 3 years, residual $500)

Required:

Part A (Practical component)

Record the information provided abovein the templates provided at the end of this documentfor DS Gardening by completing the following steps:

Create a chart of accounts
Enter the data in the general journal
Post the entries to ledger accounts
Total the ledgers and prepare a trial balance
Transfer the data to prepare the four financial statements

Part B (Written component)

Answerbothparts (place your answers in the same word document as Part A):

Analyse the financial statements you created. If you were Darcy, would you be happy with the performance, position and cash flow of the business at the end of January? Explain and justify with any assumptions you make. Maximum 200 words.

Ans: If I was Darcy, Id have mixed feelings about how the business went in January. The cash flow looks good there’s a solid amount of service income coming in, and the business ended the month with more cash than it started with. Thats positive. But when you look at the income statement, the business made a loss of $2,255, which isnt great. Most of that came from big expenses like depreciation and disposal costs, so even though money is coming in, its not being used efficiently yet.

The balance sheet shows that the business still has a strong asset base and not a lot of liabilities, so financially its not in a dangerous spot. But if the business keeps making losses like this, it might become a problem over time. Id be happy with how the cash is being managed, but Id want to keep a closer eye on how much is being spent and whether those expenses are really helping the business grow.

Im also assuming that this is the businesss first month, so some losses are probably expected during the start-up phase.

Reflect on the process you undertook in Part A to complete this assignment. Identify which part of the recording process you found to be the most challenging and explainwhy. Maximum 100 words.

Ans: The most challenging part of the process was creating theBalance Sheet. I found it tricky to properly classify accounts into assets, liabilities, and equity. Ensuring that the numbers balanced correctly required a lot of attention, especially when I noticed a slight imbalance that needed to be resolved. I had to review each account thoroughly to make sure everything was correctly categorized and accounted for. This part of the task helped me develop a better understanding of how financial statements connect and the importance of accuracy in accounting.

Marking criteria:

Submissions will be marked based on the accuracy of the recording process, presentation and formatting of accounting records, and quality of theoretical responses.

Templates

Please use these templates to complete Assignment 1.

You must edit them(add or remove lines, format the text with underline or bold, add full titles etc to make them suitable for your needs). Presentation is important.

CHART OF ACCOUNTS

No.	Account Name
100	Cash
140	Mobile phone
160	Gardening Equipment
180	Vehicle
190	Disposal Expense
200	Capital
210	Fuel and Oil
360	Advertising
400	Accounts Receivable
450	Service Income
460	Prepaid Advertising
500	Accounts Payable
600	Drawings
680	Trailer
700	Unearned Revenue
780	Depreciation
810	Accumulated depreciation
910	Fuel and oil Expense

GENERAL JOURNAL

Date	Details	No.	Debit	Credit
1 Jan	Cash	100	1,300
	Capital-Owner	200		1,300
	(Owner invested cash)

1 Jan	Mobile Phone	140	900
	Capital-owner	200		900
	(Owner invested mobile phone)

1 Jan	Gardening Equipment	160	1,800
	Capital-Owner	200		1,800
	(Owner Invested gardening equipment)

1 Jan	Vehicle	180	8,600
	Capital-Owner	200		8,600
	(Owner invested vehicle)

2 Jan	Advertising	360	440
	Cash	100		440
	(Spent to advertise)

4 Jan	Cash	100	160
	Service Income	450		160
	(Income from lawn mowing)

4 Jan	Disposal Expense	190	25
	Cash	100		25
	(Disposed garden waste)

5 Jan	Fuel and Oil	210	90
	Cash	100		90
	(Purchased fuel and oil for gardening equipment)

9 Jan	Account Receivable	400	170
	Service Income	450		170
	(Gardening work for regular Client)

10 Jan	Trailer	680	2660
	Account Payable	500		2660
	(Bought second hand trailer)

11 Jan	Cash	100	110
	Service Income	450		110
	(Performed lawn mowing)

11 Jan	Cash	100	155
	Service Income	450		155
	(Performed gardening)

11 Jan	Disposal Expense	190	85
	Cash	100		85
	(Disposed Garden waste)

12 Jan	Drawings	600	100
	Cash	100		100
	(Owner withdrew for personal use)

15 Jan	Cash	100	410
	Service Income	450		410
	(Performed several lawn mowing)

18 Jan	Fuel and Oil	210	140
	Cash	100		140
	(Purchased fuel and oil)

19 Jan	Cash	100	170
	Accounts Receivable	400		170
	(Receive payment for the client whose invoice was dated on 9^thJan)

20 Jan	Accounts Payable	500	800
	Cash	100		800
	(Paid an install to creditors)

22 Jan	Cash	100	520
	Service Income	450		520
	(Completed gardening project)

22 Jan	Disposal expense	190	120
	Cash	100		120
	(Disposed garden waste)

25 Jan	Cash	100	205
	Service Income	450		205
	(Performed lawn mowing)

25 Jan	Accounts Receivable	400	125
	Service Income	450		125
	(performed gardening services)

26 Jan	Cash	100	280
	Service Income	450		280
	(Client paid to mow their lawn for 4 weeks)

28 Jan	Drawings	600	250
	Cash	100		250
	(Owner withdrew for personal use)

31 Jan	Service Income	450	210
	Unearned revenue	700		210
	(Mowed the clients lawn once)

31 Jan	Fuel and Oil Expense	910	200
	Fuel and Oil	210		200
	(Fuel and Oil on hand)

31 Jan	Prepaid Advertising	460	110
	Advertising	360		110
	(75% of advertising is consumed)

31 Jan	Depreciation	780	900
	Accumulated Depreciation	810		900
	(Mobile Phone)

31 Jan	Depreciation	780	600
	Accumulated Depreciation	810		600
	(Gardening equipment)

31 Jan	Depreciation	780	1200
	Accumulated Depreciation	810		1200
	(Vehicle)

31 Jan	Depreciation	780	720
	Accumulated Depreciation	810
	(Trailer)

LEDGERS

Cash						100
1 Jan	Capital	1300	2 Jan	Advertising	440
4 Jan	Service Income	160	4 Jan	Disposal Expense	25
11 Jan	Service Income	110	5 Jan	Fuel and Oil	90
11 Jan	Service Income	155	11 Jan	Disposal Expense	85
15 Jan	Service Income	410	12 Jan	Drawings	100
19 Jan	Accounts Receivable	170	18 Jan	Fuel and Oil	140
22 Jan	Service Income	520	20 Jan	Accounts Payable	800
25 Jan	Service Income	205	22 Jan	Disposal Expense	120
26 Jan	Service Income	280	28 Jan	Drawings	250
	Balance	1260

Mobile Phone						140
1 Jan	Capital	900

Gardening Equipment						160
1 Jan	Capital	1800

Vehicle						180
1 Jan	Capital	8600

Disposal Expense			190
4 Jan	Cash	25
11 Jan	Cash	85
22 Jan	Cash	120
	Balance	230

Capital				200
	1 Jan	Cash	1300
	1 Jan	Mobile Phone	900
	1 Jan	Gardening Equipment	1800
	1 Jan	Vehicle	8600
		Balance	12600

Fuel And Oil						210
5 Jan	Cash	90	31 Jan	Fuel and Oil Expense	200
18 Jan	Cash	140

	Balance	30

Accounts Receivable						400
9 Jan	Service Income	170	19 Jan	Cash	170
25 Jan	Service Income	125

	Balance	125

Service Income						450
31 Jan	Unearned Revenue	210	4 Jan	Cash	160
			9 Jan	Account Receivable	170
			11 Jan	Cash	110
			11 Jan	Cash	155
			15 Jan	Cash	410
			22 Jan	Cash	520
			25 Jan	Cash	205
			25 Jan	Accounts Receivable	125
			26 Jan	Cash	280
				Balance	1925

Prepaid Advertising						460
31 Jan	Advertising	110

Trailer						680
10 Jan	Account Payable	2660

Unearned Revenue						700
			31 Jan	Service Income	210

Depreciation			780
31 Jan	Accumulated Depreciation	900
31 Jan	Accumulated Depreciation	600
31 Jan	Accumulated Depreciation	1200
31 Jan	Accumulated Depreciation	720
	Balance	3420

Accumulated Depreciation				810
	31 Jan	Depreciation	900
	31 Jan	Depreciation	600
	31 Jan	Depreciation	1200
	31 Jan	Depreciation	720
		Balance	3420

Fuel and Oil expense						910
31 Jan	Fuel and Oil	200

TRIAL BALANCE

Trial Balance
DS Gardening
As at 31 January 2025
No.	Account Name	Debit	Credit
100	Cash	1260
140	Mobile phone	900
160	Gardening Equipment	1800
180	Vehicle	8600
190	Disposal Expense	230
200	Capital		12600
210	Fuel and Oil	30
360	Advertising	330
400	Accounts Receivable	125
450	Service Income		1925
460	Prepaid Advertising	110
500	Accounts Payable		1860
600	Drawings	350
680	Trailer	2660
700	Unearned Revenue		210
780	Depreciation	3420
810	Accumulated depreciation		3420
910	Fuel and oil Expense	200
	Total	20015	20015

INCOME STATEMENT

Income Statement
DS Gardening
As at 31 January 2025
	$	$
Income
Service income	1925
Total		1925

Expenses
Disposal Expense	230

Advertising	330
Depreciation	3420
Fuel and Oil Expense	200	(4180)
Profit (loss)		(2255)

STATEMENT OF CHANGES IN EQUITY

Statement of Changes in equity
DS Gardening
As at 31^stJanuary 2025
	$
Opening Capital	12600
Less: Drawings	(350)
Less: Net Loss	(2255)
Closing Capital	9995

BALANCE SHEET

Balance Sheet
DS Gardening
As at 31^stJanuary 2025
Current Assets	$	$	Current Liabilities		$
Cash	1260		Accounts Payable	1860
Accounts Receivable	125		Unearned Revenue	210
Prepaid Advertising	110		Total		2070
Fuel and Oil	30
Total		1525

Non-Current Assets			Non-Current Liabilities
Mobile Phone	900
Gardening equipment	1800
Vehicle	8600
Trailer	2660
Less: Accumulated Depreciation	(3420)
Total		10540	Owners Equity
			Closing Capital	9995
			Total		9995

Total Assets		12065	Total Liabilities and Owners Equity		12065

STATEMENT OF CASH FLOWS

Statement of Cash Flow
DS Gardening
As at 31^stJanuary 2025
Cash flows from Operating Activities	$	$
Cash Inflows:
Service Income	1840
Account receivable	170
Total Inflow		2010

Cash Outflow:
Advertising	440
Fuel and Oil	230
Disposal Expense	230
Total outflow		(900)

Net cash from operating Activities		1110

Cash flows from Investing Activities
N/A

Cash flows from Financing Activities
Cash Inflow:
Capital	1300
Cash Outflow:
Drawings	(350)

Net Cash from Financing Activities		950

Net Cash Flow		2060