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.
ACC/ACF1100
Introduction to Financial Accounting
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 13th April 2025 at 11:55 pm (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 (record 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 involved.
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 | End-of-month adjustments: |
- Darcy mowed the regular client's lawn (the client who had already paid). He estimated that he would mow the lawn three more times while they are away.
- Darcy estimates that he has $30 worth of fuel and oil on hand.
- 75% of the advertising has been consumed.
Depreciation details (all straight-line method):
- Phone (Life = one year, $0 residual)
- Gardening equipment (Life = 3 years, $0 residual)
- Vehicle (Life = 5 years, $2,600 residual)
- Trailer (Life = 3 years, residual $500)
Required:
Part A (Practical component)
Record the information provided above in the templates provided at the end of this document for 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)
Answer both parts (place your answers in the same Word document as Part A):
- Analyse the financial statements you prepared:
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. - 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 explain why. Maximum 100 words.
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.
Please use the set 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