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acc-auren Flintoff is the owner of a retail sports equipment business located in Milton that she est




Question;BACKGROUND AND FACTSLauren Flintoff is the owner of a retail sports equipment business located in Milton that she established 3 years ago. She operates the business as a sole trader.Lauren submits her Business Activity Statements (GST Return) quarterly on an accruals basis.Lauren is currently using a manual system to prepare her financial records. She has come to you to implement QuickBooks software. To ensure the accuracy of the software implementation, she has asked you to prepare both manual records and records in QuickBooks for the month ending 30 April, 2014.Chart of Accounts and Trial Balance as at 1 April, 2014Account No. Account Name BalanceDR CR101 Cash at Bank - ANZ 27,580110 Accounts Receivable 36,518112 Inventory 46,770115 Prepaid Insurance -118 Office Supplies Inventory 1,520130 Office Equipment 29,080131 Accumulated Depreciation - Office Equipment 14,040135 Computer Equipment 24,460136 Accumulated Depreciation - Computer Equipment 15,288200 Tax Payable (GST) 12,450201 Accounts Payable 28,970203 Wages Payable -205 PAYG Tax Payable 5,180301 Capital 90,000Total 165,928 165,928302 Drawings 307 Income Summary401 Sales Revenue402 Sales Returns & Allowances405 Interest Revenue501 Cost of Goods Sold503 Bank Charges505 Depreciation Expense - Computer Equipment506 Depreciation Expense - Office Equipment510 Entertainment Expense520 Insurance Expense542 Office Supplies Expense560 Rent Expense580 Telephone and Internet Expense585 Wages ExpenseAccounts Receivable Subsidiary Ledger as at 1 AprilDawson Training 23,120Indigo Sports Centre 7,448Weston High School 5,950Total 36,518Accounts Payable Subsidiary Ledger as at 1 April Premium Accountants 3,850Ballistic Sports Equipment 16,500Insight Computers 4,520Odin Training & Recruitment 1,100Sports Wholesalers 3,000Total 28,970Inventory Balances as at 1 AprilActive Sports sells three types of inventory and uses a perpetual inventory system.The stock take at 31 March showed:Item Description Units on Hand Unit Cost(excl GST)$ Total Value(excl GST)$ Unit Selling Price(excl GST)$Tennis racquets 64 160 10,240 320Cross-Trainers 23 110 2,530 220Skis 17 2,000 34,000 4,00046,770 Accounting InformationThe business uses the following specialised journals to record its business transactions:? A Sales Journal is used to record the sale of inventory on credit during the month.? A Cash Receipts Journal is used to record all cash received.? A Cash Payments Journal is used to record all cash paid.? A Purchases Journal is used to record all purchases of inventory on credit.? A General Journal is used to record all other transactions. All invoices received for expenses incurred and owing are recorded in the general journal at the time of receiving the invoice. (Narrations are not required for general journal transactions.)The business uses a general ledger, an accounts receivable subsidiary ledger and an accounts payable subsidiary ledger. The 4 column running balance form of ledger account is used.The business does use a Sales Returns and Allowances account in the current manual system to record sales returns from customers. Note that there is no ability in our Quickbooks student version software to record Sales Returns separately. Instead the software will process a sales return as a reduction from Sales Revenue.NOTE: There is an extra column in the ledger accounts to make a note of source document numbers etc. We do not have such information so you may leave this column blank.Financial statements are prepared at the end of each month. The accounts are also closed off at the end of each month.All necessary pro-formas are available on the Blackboard site and are to be used to complete the manual accounting practice set. Quick Books software is to be used to prepare computerised records in Part B to ensure they agree.The business transactions that occurred in April 2014 are as follows:1. April 1 Paid rent for April $4,400 with cheque number 46 ($4,000 plus GST $400).2. April 1 Purchased an Apple MacBook Pro on credit from Insight Computers for $1,342 ($1,220 plus GST $122)3. April 2 Purchased office supplies with cheque number 47 for $770 ($700 plus GST $70)4. April 2 Sold 5 pairs of skis on credit to Snowy Resort, invoice number AB32 $22,000 ($20,000 plus GST $2,000).5. April 3 Purchased 40 tennis racquets on credit from Dunlop $ 7,040 ($6,400 plus GST $640).6. April 4 Paid for prepaid insurance of $1,320 for 12 months effective 1 April ($1,200 plus GST $120) with cheque number 48.7. April 4 Sold 23 pairs of cross-trainers, 6 tennis racquets and 1 pair of skis as a cash sale for $12,078 ($10,980 plus $1,098 GST), receipt number C324.8. April 4 Lauren withdrew $8, 000 cash for her personal use with cheque number 49 (no GST is applicable.)9. April 4 Paid the monthly net wages of the staff of $10,400 with cheque number 50 (no GST is applicable.)10. April 10 Sold 4 pairs skis and 20 tennis racquets on credit to Mainstream Adventures, Invoice Number AB33 $24,640 ($22,400 plus GST $2,240).11. April 11 Purchased 50 pairs of cross trainers and 5 pairs of skis on credit from Sports Wholesalers $ 17,050 ($15,500 plus GST $1,550).12. April 14 Paid Premium Accountants the balance owing of $3,850 with cheque number 51.13. April 21 Paid Ballistic Sports Equipment $15,400 with cheque number 52 as part payment of prior month purchases of inventory.14. April 21 Issued a credit note to Mainstream Adventures for return of 2 tennis racquets, Credit Number 14 $704 ($640 plus GST $64).15. April 22 Received $15,200 from Dawson Training as payment on account.16. April 26 Paid the monthly telephone and internet expense with cheque number 53 for $275 (GST $25).17. April 26 Invoiced Dawson Training for 40 tennis racquets, Invoice Number AB34 for $14,080 ($12,800 plus GST $1,280).18. April 28 Received $6,000 on account from Indigo Sports Centre.19. April 28 Returned 5 pairs of cross trainers to Sports Wholesalers and received a credit of $ 605 ($550 plus GST $55).20. April 30 Lauren lodged her quarterly Business Activity Statement (BAS return) and paid cheque number 54 to the ATO for a total of $17,630. This represented the March quarter net GST payable of $12,450 and also the previous month PAYG tax payable of $5,180 (record each transaction on a separate line).21. April 30 Received $22,000 from Snowy Resort as payment on account.22. April 30 Bank statement: Received interest into the bank account $125. (no GST applicable)23. April 30 Bank Statement: Bank charges of $25 (no GST applicable)24. April 30 Record a general journal entry for $2,590 for the total PAYG tax withheld on the monthly wages. (Debit wages expense and credit PAYG Tax Payable).Part A Instructions (1 ? 8)1) Enter the opening balances at 1 April into the general ledger and subsidiary accounts.2) Record the April transactions in the following journals: cash payments, cash receipts, purchases, sales and the general journal.3) Post daily to the subsidiary ledgers. Post daily from the general journal. Post the monthly totals of the special journals to the general ledger. Include posting references in the journals.4) Prepare a trial balance as at 30 April 2014, in the trial balance columns of the worksheet.5) Complete the worksheet using the additional information below on required adjusting entries:A) Accrued WagesWages owing as at 30 April are $3,300.B) InsuranceNoted in the transactions above, Lauren prepaid 12 months of insurance on April 4.C) Depreciation ? Office EquipmentAnnual Depreciation on Office Equipment has been calculated at $5,616.D) Depreciation ? ComputersAnnual Depreciation on Computers has been calculated at $6,840.E) Office Supplies ExpenseOn 30 April, Lauren performed a stocktake of her office supplies and noted that there was $370 of supplies remaining.6) Prepare and post adjusting and closing entries.7) Prepare the following statements for month ended 30 April in accordance with AASB 101:- a classified income statement- a statement of changes in equity and- a classified statement of financial position.Note that there is a need to split Sales and Sales Returns separately in the manual system as discussed earlier.For the purposes of expense classification, please use the following information:Selling Expenses:WagesAdministrative Expenses:Depreciation ? Computer Equipment, Depreciation ? Office Equipment, Insurance Expense, Office Supplies Expense, Rent Expense, Telephone and Internet ExpenseFinance Expenses:Bank Charges8) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.


Paper#41713 | Written in 18-Jul-2015

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