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On May 1st, you started a new business in the food industry with only $30,000 of your own cash

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On May 1st, you started a new business in the food industry with only $30,000 of your own cash. You are very excited about your new venture, but it has also been keeping you very busy. It is now June and you are running behind on your bookkeeping, which is concerning. In fact, you have no idea how your new company is performing financially. You have never even taken an accounting course before!

You decided to hire an accountant to help you with your bookkeeping. The accountant has requested some information to help them prepare your financial information. Due to COVID-19 social distancing rules you are not allowed to meet in the office. Instead you will have to communicate via email. The following is the email request from your new accountant.

Dear Client,

Congratulations on your new venture! Thank you for choosing Kontur and Associates as your accounting firm. Please provide us the following information so that we may assist you in compiling the following financial statements for last month:

• Income Statement

• Balance Sheet

• Statement of Changes in Equity

In order to assist you please provide us with the following information:

• The name and brief description of your operations and structure of your business.

• Description of all the transactions for the month of May.

We look forward to hearing back from you.

Sincerely,

Anita Bean Kontur, CPA

 

INSTRUCTIONS

Phase 1: Business Owner (5%)

Your Role: New Business owner (The Client)

Required: Respond to Ms. Kontur’s email providing her with the following information:

1. A description of your business (approx. 150 words), including the name, type of business and structure / form of your business.

2. A description of all the accounting transactions for the month of May including the transaction number, transaction date, dollar amount and method of payment (where required, eg, cash, credit card or financing). Using the table below to list the business activity including:

1. 6 operating activities (O)

2. 3 investing activities (I)

3. 3 financing activities (F)

Trans No.	Trans Date	Description	Activity Type (O, I, F)
1.	May 1	I invested $30,000 cash into my new business.	F

Please ensure that your email is professional and written in full sentences. Once approved by the teacher, forward a copy of your marked phase 1 submission to your partner “the bookkeeper”. Y

 

This assignment will help you understand the “big picture” for the accounting cycle by working through each stage including analyzing the transactions, recording the journal entries, preparing a trial balance and compiling the financial statements. Resources: The class lessons, PowerPoints and assigned readings from classes 1-4 will assist you in completing the assignment. For additional resources see the following videos: 1. 2. 3. 4. 5. The Accounting Equation for Beginners (4:57 minutes) Accounting Basics: Debits and Credits Explained (5:43 minutes) T Accounts Explained SIMPLY (11:07 minutes) How Journal Entries Work (6:48 minutes) The Trial Balance Explained (7:35 minutes) Note: Review the grading rubric before starting the assignment. Download Individual Assignment Rubric ? EditSign (PDF (46 KB) - will open in new window) BACKGROUND On May 1st, you started a new business in the food industry with only $30,000 of your own cash. You are very excited about your new venture, but it has also been keeping you very busy. It is now June and you are running behind on your bookkeeping, which is concerning. In fact, you have no idea how your new company is performing financially. You have never even taken an accounting course before! You decided to hire an accountant to help you with your bookkeeping. The accountant has requested some information to help them prepare your financial information. Due to COVID-19 social distancing rules you are not allowed to meet in the office. Instead you will have to communicate via email. The following is the email request from your new accountant. Dear Client, Congratulations on your new venture! Thank you for choosing Kontur and Associates as your accounting firm. Please provide us the following information so that we may assist you in compiling the following financial statements for last month: • • • Income Statement Balance Sheet Statement of Changes in Equity In order to assist you please provide us with the following information: • • The name and brief description of your operations and structure of your business. Description of all the transactions for the month of May. We look forward to hearing back from you. Sincerely, Anita Bean Kontur, CPA INSTRUCTIONS Phase 1: Business Owner (5%) Your Role: New Business owner (The Client) Required: Respond to Ms. Kontur’s email providing her with the following information: 1. A description of your business (approx. 150 words), including the name, type of business and structure / form of your business. 2. A description of all the accounting transactions for the month of May including the transaction number, transaction date, dollar amount and method of payment (where required, eg, cash, credit card or financing). Using the table below to list the business activity including: 1. 6 operating activities (O) 2. 3 investing activities (I) 3. 3 financing activities (F) Trans No. 1. Trans Date May 1 Description I invested $30,000 cash into my new business. Activity Type (O, I, F) F Please ensure that your email is professional and written in full sentences. Once approved by the teacher, forward a copy of your marked phase 1 submission to your partner “the bookkeeper”. Your partner will use your submission to complete Phase2. Phase 2: Bookkeeper (15%) As an employee of Kontur and Associates you have been asked to compile the information requested by the client. Based on the information provided in the email complete the following information for Ms. Kontur’s review using the excel template provided. 1. 2. 3. 4. Enter the journal entries to record all of the business activity for the month of May. Compile a trial balance from the journal entries. Prepare the income statement, statement of changes in equity and balance sheet for your client. Prepare an email to Ms. Kontur to submit with the file. Discuss the following: o As you are very ambitious and want to demonstrate your analytical skills, provide your insight on the financial performance of your clients first month of business. o After completing the financial statements, the client sent another email to you (see Appendix A). Explain to Ms. Kontur how this new information would change the financial statements you already prepared.