ACTBAS2 INDIVIDUAL BUSINESS CASE 2ND Term, Academic Year 2012-2013 Adams Sur !

"ard# Adapted from: Weygandt, Chalmers, Mitrione, et.al. Accounting. 2nd edition Principles of

The following events are in chronological order: 1. Adam decides to buy a surfboard. 2. He calls Aussie Surfing Ltd to inquire about their surfboards. 3. Two days later, he requests Aussie Surfing Ltd to make him a surfboard. 4. Three days later, Aussie Surfing Ltd sends him a urchase order to fill out. 5. He sends back the urchase order. 6. Aussie Surfing Ltd. receives the com leted urchase order. 7. Aussie Surfing Ltd com letes the surfboard. 8. Adam icks u the surfboard. 9. Aussie Surfing Ltd bills Adam. 10. Aussie Surfing Ltd receives ayment from Adam. $UIDE %UESTI&NS' 1. !hen should Aussie Surfing Ltd record the sale" ( ustify your ans!er "y stating the generally accepted accounting principle#s that is#are follo!ed$. 2. Su ose that with his urchase order Adam is required to make a down ayment. !ould that change your answer" How would this down ayment affect the financial statements" 3. !hat should Aussie Surfing Ltd record if Adam reali#ed that the surfboard was damaged when he icked it u and therefore returned it" $ention if there are other o tions available in relation to the return and how should they be treated in the books of Aussie Surfing Ltd. (E%UI(ED' !rite a %&'()A*' memo to the chief e+ecutive office of Aussie Surfing Ltd. ,nclude in the memo your answers to the guide questions above. -ollow the format given below. )&(*AT &) *E*&

Letter heading:
DATE' T&' (%nsert deadline here$ &ame of your )rofessor .hief '+ecutive %fficer Aussie Surfing .o. (%nsert your signature here & a"o'e your name$ (%nsert your name here$ Accountant, (%ndicate your section here$

)(&*'

(E' Adams Sur !"ard (((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((( (%nsert here the content of your memo$ )a er si#e: Letter /0.12 + 3324 $argins: - To 5 32 - 6ottom 5 32 - Left 5 3.712 - 8ight 5 3.712 -ont and font si#e: Tahoma 33 )aragra h alignment : 9ustified Line s acing: Single :eadline: $! .lass 5 &c+"!er 22, 2012 ,*"-da./ TH .lass 0 &c+"!er 23, 2012 ,Tuesda./