Course Work Assessment - Project

Semester 202410 Division Business

Assessment
title in Project Program ACC
Syllabus

Course
ACC 1003
Code
Course Title Fundamentals of Financial Accounting
Course
CRN
Instructor
Assessment Submissio
Weight n Date
For Group Work submissions an additional
individual assessment will be conducted.
Grades for the students in one group will vary
based on the individual performance in the
additional assessment.

Student Declaration:
Academic Integrity Statement
In accordance with the HCT Academic Integrity Policy
• Students are required to refrain from all forms of
academic integrity breaches as defined and explained
by HCT.
• A student found guilty of having committed acts of
academic integrity breach(es) will be subject to the
relevant sanctions as outlined by HCT.
‫إفادة النزاهة األكاديمية‬
‫وفًقا لسياسة كليات التقنية العليا للنزاهة األكاديمية‬
‫ كما هو مبّين‬،‫• على الطلبة اإللتزام بلوائح وقواعد النزاهة األكاديمية‬
.‫وموضح في السياسات واإلجراءات الخاصة بكليات التقنية العليا‬
‫• في حالة ارتكاب الطالب أي شكل من أشكال اإلخالل بالنزاهة‬
‫ سيتعرض الى العقوبات الموضحة في السياسات ذات‬،‫األكاديمية‬
.‫الصلة‬
This assignment is entirely my own work except where I
have duly acknowledged other sources in the text and
listed those sources at the end of the assignment. I
have not previously submitted this work to the HCT, or
any other entity. I understand that I may be orally
examined on my submission.
Student (s) Signature:
___________________________________
___________________________________________

Student
Name(s):
Student
HCT ID(s):
For Examiner’s Use Only

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 Section No. Total %
Marks
Allocated
Marks
Obtained

AI and Chatbot ( e.g. ChatGPT ) statement

This submission does not allow you to use any AI tool to complete. Any
breach of this requirement will be treated as a plagiarism attempt and
shall be subject to the HCT Academic Integrity Policy.
Coversheet instructions:

This assessment will assess the following Learning outcome/s:

CLO2: Apply double entry principles and procedures to complete the accounting cycle
CLO 3: Prepare adjusting entries at the end of the year and adjusted trial balance
CLO 4: Prepare financial statements

Declaration: Individual

■ No part of this assignment has been copied from another source, (not from another group or
student, an internet source or a book)
■ When another person’s words are used, this is shown in the text with “…” and referenced.
■ No part of this assignment has been written for me by any other person.
■ I have a copy of this assignment that I can produce if the first copy is lost or damaged.

Names:

Signatures:

N.B. The marker may choose not to mark this assignment if the above declaration is not signed.

■ If the declaration is found to be false, appropriate action will be taken.

■ Plagiarism is copying and handing in someone’s work as your own. Any student found guilty of this
type of cheating will be dismissed from the college.

Received By: ……………………………..…………………………………. Date: ……………..……………

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 Group Project: Preparing Financial Statements for an Elite Gym Services

Part 1: Project overview

Elite Gym Services is selected as the business of commercial enterprise that focuses on promoting
physical health, improving physical performance, or offering services and products related to fitness
and well-being. This encompasses a broad range of entities including gyms, personal training
services, fitness classes, fitness equipment manufacturers and retailers, health clubs, wellness
centers, nutrition consultation, and even software platforms and apps dedicated to tracking or
promoting physical activity and health.

Aims and objective Objectives:

The primary goal of Elite Gym Services is to help individuals achieve their fitness objectives, whether
that’s weight loss, muscle building, improved athletic performance, or general well-being. Following
are the aims of this project

 To understand and apply the principles of financial accounting for the Elite Gym
Services
 To develop practical skills in preparing financial statements for Elite Gym Services
 To collaborate effectively in a team environment for Elite Gym Services

Part 2: The assignment: Scaffolding steps for students

Step 1: INTRODUCTION: Company description

A fitness business is a venture that offers a variety of fitness-related services to clients. The name
assigned to the proposed fitness business is Elite Gym Services. The services that are provided by the
proposed company lies in the range of personal training sessions and group fitness classes to
wellness coaching and specialized programs. In essence, a fitness business is all about helping
individuals achieve their health and fitness goals in a supportive and empowering environment. The
date and year of starting business is 10 November 2024, and its location is in the Gym Nation Bur
Dubai. The owner of the company is Hamad and capital investment for this business is 30,000 AED.
However, following services offered by company included:

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  Boxing
 Calisthenics
 Cardio
 Fitness classes
 Free weights
 Functional training
 HIIT classes
 Ladies only areas
 Les Mills classes
 Spinning classes
 Yoga
 Personal Trainer
 Ladies’ personal trainer
 Personalized goals
 Private coaching
Step 2 and 3: Prepare Transaction description and respective journal entries

1. MAY 1st: Invested 150,000 AED in cash to start the company.

2. MAY 5th: Paid first-year rent in advance 20,000 AED.
3. MAY 6th: Paid 8,000 AED cash for 12-month Insurance policy
4. MAY10th: Purchased equipment on account for 25,000 AED from Fitness Depot
5. MAY 12th: Provided consulting services on credit to client ShapeFit for 10,000 AED.
6. MAY 15th: Purchased supplies for 10,000 AED in cash.
7. MAY 20th: Provided Fitness Classes (services) and collected 5,000 AED in cash.
8. MAY 22nd: Paid Fitness Depot 25,000 AED for equipment purchased on MAY10th.
9. MAY 28th: Withdrew 5,000 AED for personal use.
10. MAY 29th: Fitness First group paid AED 8,000 in advance for the services to be
performed at the end of the year
11. MAY 30th: Paid Assistant’s salary of 4,500 AED in cash.
12. MAY 30th: Paid advertising expense of 1200 AED to a newspaper company.
13. MAY 30th: Paid Internet bill for 1,800 AED to DU for the month.
14. Step 3: Prepare Transaction description and respective journal entries
Table 1 Journal

Date Details Debit Credit

May 1st Cash 150,000 ---
Khalifa’s Capital --- 450,000

May 5th Prepaid Rent 20,000 ---

Cash --- 20,000

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 May 6th Prepaid Insurance 6,000 ---

Cash --- 6,000

10-May Equipment 25,000 ---

Accounts Payable --- 0

12-May Accounts Receivable 10,000 ---

Service Revenue --- 10,000

15-May Supplies 12,000 ---

Cash --- 12,000

20-May Cash 15,000 ---

Service Revenue --- 5,000

22-May Accounts Payable 25,000 ---

Cash --- 25,000

28-May Khalifa’s Withdrawals 4,000 ---
Cash --- 4,000
29-May Cash 8,000 ---
Unearned Revenue --- 8,000
30-May Salaries Expense 4,500 ---
Cash --- 4,500
30-May Advertising Expense 1200 ---
Cash --- 1200
30-May Utilities Expense 1,800 ---
Cash --- 1,800

Table 2 Ledger accounts

Ledger accounts
Debit Credit
Khalifa’s Capital 300,000

Prepaid Rent 20,000

Prepaid 12,000
Insurance

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 Equipment 25,000

Accounts Payable 0

Accounts 10,000
Receivable

Service Revenue 10,000

Supplies 12,000
Khalifa’s 4,000
Withdrawal
Unearned 8,000
Revenue

Salaries Expense 4,500

Advertising 1200
Expense

Utilities Expense 1,800

Balance 64,500

Step 4: Transactions for making adjustments

Transactions for Adjusting Entries at 31 DEC 2023:

1. Equipment Depreciation: The company purchased equipment in May 2023.

It is depreciated at 3,000 AED annually.
2. Prepaid Insurance: An analysis of company’s insurance policy 8 months of
insurance policy has been expired and unrecorded.
3. Prepaid Rent: By December 31, 8 month’s rent has been used.
4. Accrued Salaries: Salaries expense of AED 5,000 has been incurred but not
paid as of December 31, 2023.
5. Accrued Revenue: Services performed for a client for AED 6,000 in
December 2023 have not been recognized and recorded.
6. Unearned Revenue: Out of the AED 8,000 of unearned revenue, service
worth AED 6,000 was performed during December 2023.
7. Supplies: A physical count shows AED 5,200 of supplies available. The
supplies used need to be calculated and recorded.
8. Utilities Expense Accrual: Utilities expense of AED 3,500 for December has
not been paid and recorded.

Step 5: Record the transactions of adjusting entries

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 Accrued expenses

Accrued expenses, or accrued liabilities, are those that you incur in a pay period but pay for at a later
date. This can happen with recurring bills, like utilities or payroll.

Date Details Debit Credit

Date Details Debit Credit
September 30 Electricity bill $12,000
September 30 Accrued expenses $12,000

Accrued revenues

Accrued revenue is when you earn money for providing products or services to customers but
receive payment later.

Date Details Debit Credit

December 30 Accrued revenue $5,000
December 30 Revenue $5,000

Deferred expenses

Deferred or prepaid expenses are amounts companies pay in advance for services.

Date Details Debit Credit

March 28 Prepaid rent $2,800

March 28 Cash $2,800

Step 6: Prepare the adjusted Trial Balance

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 Figure 1 Prepare the adjusted Trial Balance

Step 7: Prepare the Financial statements

Table 3 Income Statement

Elite Gym Services

Income Statement

December 31st, 2023

Revenue:

Service Revenue 25,800

Expenses:

Salaries Expense -16,000

Advertising Expense -800

Utilities Expense -6,350

Depreciation Expense -1,900

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 Insurance Expense -6,000

Rent Expense -14,000

Supplies Expense -4,600

Total expenses: -49,650

Net income: -23,850

Table 4 Balance Sheet

Elite Gym Services

Balance Sheet

December 31st, 2023

Assets

Cash 218,950

Accounts Receivable 14,800

Equipment 23,100

Supplies 7,400

Prepaid Rent 14,000

Prepaid Insurance 6,000

Total Assets 284,250

Liabilities

Accounts Payable 0

Salaries Payable 5,500

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 Utilities Payable 4,600

Unearned Revenue 1,000

Total Liabilities 11,100

Owner’s equity 273,150

Total Liabilities and Owner’s 284,250

equity

Step 8: Reporting - Financial performance of the company

Elite Gym Services did not turn a profit, according to the Income Statement. The large expenses that
the minimal service revenue could not cover are the cause of the loss. Because of the high costs, the
owner's equity has also not increased in comparison to the initial investment.

Reference materials: Textbooks, e-textbooks, PowerPoint presentations, activities, class notes and
any online resources.

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