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ACC506 Task 2 Part B

26 Jan

ACC506 Task 2 Part B

This assessment is due on Friday 10th February (week 10) by 5pm

 

This assignment must be your own individual work, i.e. it is not a group assignment. If it is believed that a student has copied material from another student or any other source without appropriate referencing, the necessary action will be taken under the University’s Student Academic Integrity – Governing Policy: (http://www.usc.edu.au/explore/policies-and-procedures/student-academic-integritygoverning-policy). Please contact your local campus lecturer/tutor if you have any queries. Alternatively, you can post your query to the Discussion Board on the course Blackboard site.

The assignment should only be submitted electronically via Safe Assignment on the ACC506 ATMC Blackboard site. If you wish to apply for an extension to your submission date, please email the course coordinator (Kirsty Dunbar kdunbar@usc.edu.au) to explain the circumstances and attach any necessary supporting documentation.

Late penalties will be applied to all assignments submitted after Friday 23rd by 5pm without an approved extension. More details on late penalties are provided in the course outline.

 

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Note Well: You are to record the transactions from week 1 that you did in Task 2 Part A plus the rest of the month of June using special journals and running balance accounts instead of the General Journal and “T” account format you used in Part A. The month of June is shown in the calendar above.

 

When you are using the special journals you do not use the General Journal as well! Just the special Journals.

 

 

 

 

 

 

 

INSTRUCTIONS

 

Task 2 Part B Requirements:

 

Stage 1

 

Use the spreadsheet template provided to complete the following requirements.

When using the spreadsheet you are required to provide the links from the General Ledger Accounts to the Live Trial Balance.

 

 

  1. Link the balances of the General Ledgers to the Live Trial Balance
  2. Enter the transactions into the appropriate Special Journals.
  3. Important: After each transaction that particular journal should be in balance. If it is not, fix it before recording the next transaction.
  4. Do the Bank Reconciliation and enter transactions as required.
  5. Post (Link) the transactions from the Special Journals to the appropriate General Ledger Accounts the balances of which should flow to the Live Trial Balance.
  6. Important: Posting should be done from the total of each column unless recorded in “Other Account” column.
  7. Important: Post the entire journal and check that the Live Trial Balance is in balance before moving to the other journals. If it is not in balance, fix it before moving on.
  8. Copy the Live Trial Balance and create a Fixed Trial Balance using Special Paste Values into your worksheet.
  9. Do the adjustments into and complete the worksheet
    • Note well: the worksheet is a separate document. No linking is permitted from the worksheet to any of the financial statements. It is used as a checking mechanism that ensures your financial statements prepared in step 13 match the worksheet.
  10. Journalise the adjustments in the General Journal and post to the General Ledgers. Check that the Live Trial Balance is in Balance  before moving to the next transaction. If it is not in balance, fix it before moving on.
  11. After all adjustments have been posted the Live trial Balance should be the same as the adjusted trial balance of the worksheet.
  12. Copy the Live Trial Balance worksheet and create a Fixed Trial Balance worksheet using Special Paste Values into the worksheet.
  13. Use the Fixed Trial balance to help you complete a Profit & Loss statement, Statement of Partners Equity and a Balance Sheet for month of trading.

 

 

 

Stage 2

Write a brief report to Julie and Katy commenting on the financial performance of the business:

  • Calculate the following financial ratios and provide comments –
    • Current ratio
      • Industry average is 5:1
      • Accounting Norm is 3:1
    • Quick ratio
      • Industry average is 4 : 1
      • Accounting Norm is 1:1

 

  • Calculate and provide a cash flow statement for the first month of trading.
  • Using academic references (recorded using Harvard Referencing style) list and briefly explain the registrations and legal requirements that Julie and Katy would have undertaken to establish the business name and partnership.

 

 

 

Transactions begin on the following page

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at the 1st June, Julie Jones and Katy Perry establish a new business JK Café & Catering (a partnership with 50% equal share in profits to both regardless of Proprietor’s Contribution). They register the new business and open a new bank account with the local branch of Eastside Bank. Note the business is also registered for GST.

 

JUNE TRANSACTIONS:

 

FIRST WEEK

  • Monday 1sth June
    • Julie deposits cash of $15,000 into the new Bank Account and Katy contributes $2,000 cash and:
      • Café equipment with a book value of $7,200
      • China glass silver and linen book value of $3,600
      • Office Equipment book value of $2,200.

 

Asset Method Expected Life Expected Salvage
Café Equipment Straight Line 4 Years $0.00
China Glass silver Linen Straight Line 2 Years $0.00
Office Equipment Reducing Balance 3 Years $5.00

 

(Note as the equipment, china glass silver linen and office equipment have been used in a previous business there is no GST attributed to the contribution).

 

Purchased $1,100 worth of General Café Supplies from Coco Suppliers – issued cheque # 0001. (Asset: 1010)

 

Purchased a computer for $440 – issued cheque # 0002. (Office Equipment)

 

Withdrew $50.00 cash from an ATM to establish a petty cash account. (No GST for this transaction)

 

Katy has the telephone installed by Rossini Communications – the contract is for a monthly line rental of $44.00 plus charges for calls made. Cheque # 0003 for $132.00 is issued.

 

Julie phoned Your Insurance Ltd and arranged for insurance of the new business and paid for one year’s coverage drew a cheque # 0004 amount $1,372.80.

 

Purchased general supplies of $110.00 on credit from Coco Suppliers who offer no discounts for early payment. (Don’t forget subsidiary ledger)

 

  • Tuesday 2nd June
    • Katy drew a cheque # 0005 and paid (Use your own name) $440.00 rent for the first week.

 

  • Katy provided catering services for Monty’s Cars on credit and invoiced them for $880.00 – invoice # JKCC 0001. A new policy offering discounts for early payment has been implemented – 2/7, n/30. (Don’t forger Subsidiary ledgers)

 

 

 

 

 

 

 

  • Wednesday 3rd June

 

  • Katy provided catering services for Sunshine Hospital on credit and invoiced them for $770.00 – invoice # JKCC 0002. A new policy offering discounts for early payment has been implemented – 2/7, n/30. (Don’t forger Subsidiary ledgers)

 

  • Friday 5thJune
    • Katy provided catering services for Sippy Animal Rescue on credit and invoiced them for $330.00 – invoice # JKCC 0003. A new policy offering discounts for early payment has been implemented – 2/7, n/30. (Don’t forger Subsidiary ledgers)

 

  • The café has revenue from daily sales of $4,400.00 Julie and Katy bank $2,400.00 and keep $1000.00 each as drawings.

 

  • Paid half of the amount owing to Coco Suppliers using Cheque # 0006

 

  • Employed new staff (Herbert Smith & Vera Smith) to be paid later in the month.

 

 

Mon Tue Wed Thu Fri Sat Sun
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29 30

 

SECOND WEEK

Julie and Katy recognise that there is a market for the sales of gourmet coffee products and coffee machines through their café. They have been advised to split the gourmet products into three categories and use a periodic inventory system on a First in First out (FIFO) basis. The coffee machines will use a perpetual inventory system on a weighted average basis.

Monday 8th June

  • Julie purchased the following products on credit from Vito suppliers:
Product Quantity Cost (includes GST)
Highland Coffee 10 $5.50
Lowland Coffee 10 $4.40
Exotic Teas 20 $8.80

Vito issued their invoice VS 0059 for $275.00 terms 2/7 n30.

  • Katy ordered the following coffee machines on credit from Power Suppliers
Coffee Machine Quantity Cost (Includes GST)
Rodger Mk2 3 $330.00
Samsang 4 $165.00
Riccardo  Mk 3 4 $220.00

 

 

 

 

 

  • Power Suppliers delivered the machines and issued invoice PS 0958for $2530.00 offering terms of 2/7 n30 as an incentive for early payment.

Tuesday 9th

  • Paid remainder of the amount owing to Coco Suppliers using Cheque # 0007.

 

  • Monty’s Cars paid their account in full taking advantage of the discount on offer.

 

  • Paid rent using Electronic Funds Transfer JK 001.

 

Thursday 11th

  • Sunshine Hospital paid their account in full taking advantage of the discount on offer.

 

  • Sippy Animal rescue paid their account in full taking advantage of the discount on offer.

 

  • Used $22.00 petty Cash for Postage Voucher 1 (Remember just use the petty cash book)

Friday 12th

  • Katy provided catering services for Gration Enterprises on credit and invoiced them for $990.00 – invoice # JKCC 0004. Terms– 2/7, n/30 (Don’t forget the Subsidiary ledgers).

 

 

  • Cash sales for the week are identified as:

 

Products # Sale Price/item
Highland Coffee 4  $       22.00
Lowland Coffee 5  $       16.50
Exotic Teas 8  $       33.00
Coffee Machines Sale Price/item
Rodger Mk 2 1  $  660.00
Samsang 2  $  330.00
Riccardo Mk 3 2  $  440.00

(Note: the Hair products are recorded using the Periodic FIFO method while the Electric Shavers are recorded using the Perpetual Moving Average method).

 

 

  • Total receipts for sales for the week amounts to $2,634.50.

 

  • Total receipts for Café Sales amounts to $3,850.00.

 

  • Julie & Katy bank $4,484.50.00 and keep $1000.00 each as drawings.

 

  • Paid Vito Suppliers for their invoice VS0059 with cheque # 0008 taking advantage of the discount.

 

  • Paid Power Suppliers for their invoice PS0958 with cheque # 0009 taking advantage of the discount.

 

  • Paid each of 2 employees (Herbert Smith & Vera Smith) using EFT (refs 0427A and 0427B) for five days (1 week) wages $700.00 (net) and withheld PAYG of $300.00 as well on behalf of each employee.

 

 

 

Third Week

Monday 15th June

Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30

 

  • Julie purchased the following products on credit from Vito suppliers:
Product Quantity Cost (includes GST)
Highland Coffee 4 $5.50
Lowland Coffee 4 $4.40
Exotic Teas 10 $8.80

 

  • Vito issued their invoice VS 0079 for $127.60 terms 2/7 n30.
  • Katy ordered the following coffee machines on credit from Power Suppliers
Coffee Machine Quantity Cost (Includes GST)
Rodger Mk2 2 $330.00
Samsang 2 $154.00
Riccardo  Mk 3 2 $198.00

 

  • Power Suppliers delivered the machines and issued invoice PS 0978for $1,364.00 offering terms of 2/7 n30 as an incentive for early payment

Tuesday 16th

  • Paid rent using Electronic Funds Transfer JK 002

Friday 19thJune

  • Cash sales for the week are identified as:

 

Products # Sale Price/item
Highland Coffee 6  $       22.00
Lowland Coffee 4  $       16.50
Exotic Teas 12  $       33.00
Coffee Machines Sale Price/item
Rodger Mk 2 2  $  660.00
Samsang 3  $  330.00
Riccardo Mk 3 3  $  440.00

(Note: the Hair products are recorded using the Periodic FIFO method while the Electric Shavers are recorded using the Perpetual Moving Average method.)

 

  • Total receipts for sales for the week amounts to ????
  • Total receipts for Café Sales amounts to $4,840.00.
  • Julie & Katy bank $7,064.00.00 and keep $1000.00 each as drawings.

 

  • Paid Vito Suppliers for their invoice VS0079 with cheque # 0010 taking advantage of the discount.

 

  • Paid Power Suppliers for their invoice PS0978 with cheque # 0011 taking advantage of the discount

 

  • Paid each of 2 employees (Herbert Smith & Vera Smith) using EFT (refs 0428A and 0428B) for five days (1 week) wages $700.00 (net) and withheld PAYG of $300.00 as well on behalf of each employee.

 

  • Used $11.00 from petty cash for Office supplies (Voucher 2).

 

Fourth Week

Monday 22nd June

Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
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22 23 24 25 26 27 28
29 30

 

  • Julie purchased the following products on credit from Vito suppliers:
Product Quantity Cost (includes GST)
Highland Coffee 6 $6.60
Lowland Coffee 6 $5.50
Exotic Teas 10 $9.90

Vito issued their invoice VS 0099 for $171.60 terms 2/7 n30.

  • Katy ordered the following coffee machines on credit from Power Suppliers
Coffee Machine Quantity Cost (Includes GST)
Rodger Mk2 2 $330.00
Samsang 2 $154.00
Riccardo  Mk 3 3 $198.00

 

  • Power Suppliers delivered the machines and issued invoice PS 1078for $1,562.00 offering terms of 2/7 n30 as an incentive for early payment

Tuesday 23rd

  • Paid rent using Electronic Funds Transfer JK 003

Wednesday 24th

  • Katy provided catering services for Sunshine Hospital on credit $660.00 and sold them a Coffee machine (Rodger Mk2) for $550.00- invoice # JKCC 0005. Terms – 2/7, n/30.
  • Katy provided catering services for Sippy Animal Rescue on credit and invoiced them for $440.00 – invoice # JKCC 0006. Terms– 2/7, n/30

 

Friday 26thJune

  • Cash sales for the week are identified as:

 

Products # Sale Price/item
Highland Coffee 8  $       22.00
Lowland Coffee 8  $       16.50
Exotic Teas 14  $       33.00
Coffee Machines Sale Price/item
Rodger Mk 2 2  $  660.00
Samsang 3  $  330.00
Riccardo Mk 3 3  $  440.00

(Note: the Hair products are recorded using the Periodic FIFO method while the Electric Shavers are recorded using the Perpetual Moving Average method.)

 

  • Total receipts for sales for the week amounts to ????

 

  • Total receipts for Café Sales amounts to $4,840.00.

 

  • Julie & Katy keep $1000.00 each as drawings and bank the rest.
  • Sippy Animal Rescue were unhappy with some of the service provided on the 24th Invoice JKCC 0006 so a refund of $55.00 is to be deducted from the invoice.

 

  • Paid Vito Suppliers for their invoice VS0099 with cheque # 0012 taking advantage of the discount.

 

  • Paid Power Suppliers for their invoice PS1078 with cheque # 0013 taking advantage of the discount.

 

  • Paid each of 2 employees (Herbert Smith & Vera Smith) using EFT (refs 0429A and 0429B) for five days (1 week) wages $700.00 (net) and withheld PAYG of $300.00 as well on behalf of each employee.

 

  • Used $11.00 from Petty Cash for a taxi fare (Voucher 3).

 

Fifth Week

Monday 29th June

Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30

 

 

  • Julie purchased the following products on credit from Vito suppliers:
Product Quantity Cost (includes GST)
Highland Coffee 4 $5.50
Lowland Coffee 4 $4.40
Exotic Teas 10 $8.80

 

  • Vito issued their invoice VS 0119 for $275.00 terms 2/7 n30.
  • Katy ordered the following coffee machines on credit from Power Suppliers
Coffee Machine Quantity Cost (Includes GST)
Rodger Mk2 2 $330.00
Samsang 4 $154.00
Riccardo  Mk 3 4 $198.00

 

  • Power Suppliers delivered the machines and issued invoice PS 1278for $2530.00 offering terms of 2/7 n30 as an incentive for early payment

 

Tuesday 30th June

  • Paid Rent using EFT JK 004
  • Withdrew Cash from Bank tellers to reimburse Petty Cash
  • Returned a faulty Rodger Mk 2 Coffee Machine and was given a credit for $330.00 against invoice PS1278
  • Gration Enterprises paid their account JKCC 0004 in full.

 

Adjustments (See instructions 9-11 above)

  1. Half of the General Café supplies have been used calculate and record the expense
  2. Calculate the outstanding payroll liability
  3. Calculate and record the insurance expense
  4. Calculate and record the Telephone expense
  5. Calculate and record the prepaid rent
  6. Calculate and record the depreciation expense for the month
  7. A stocktake of the products revealed that there were:
  • 6 Highland
  • 7 Lowland
  • 16 Tea

 

 
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Posted by on January 26, 2017 in academic writing

 

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