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Lauren Flintoff is the owner of a retail sports equipment business




Question;Lauren Flintoff is the owner of a retail sports equipment business located in Miltonthat she established 3 years ago. She operates the business as a sole trader.Lauren submits her Business Activity Statements (GST Return) quarterly on anaccruals basis.Chart of Accounts and Trial Balance as at 1 April, 2014Account No.Account NameBalanceDR101Cash at Bank - ANZ27,580110Accounts Receivable36,518112Inventory46,770115Prepaid Insurance118Office Supplies Inventory130Office Equipment131Accumulated Depreciation Office Equipment135Computer Equipment136Accumulated Depreciation Computer Equipment200Tax Payable (GST)201Accounts Payable203Wages Payable205PAYG Tax Payable301CapitalTotal302Drawings307Income Summary401Sales Revenue402Sales Returns & Allowances1,52029,08024,460165,928405Interest Revenue501Cost of Goods Sold503Bank Charges505Depreciation Expense - Computer Equipment506Depreciation Expense - Office Equipment510Entertainment Expense520Insurance Expense542Office Supplies Expense560Rent Expense580Telephone and Internet Expense585Wages ExpenseAccounts Receivable Subsidiary Ledger as at 1 AprilDawson TrainingIndigo Sports CentreWeston High SchoolTotalAccounts PayableSubsidiary Ledger as at 1AprilPremium AccountantsBallistic Sports EquipmentInsight ComputersOdin Training &RecruitmentSports WholesalersTotalInventory 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 DescriptionUnits on HandUnit CostTotal Value(exclGST)(excl GST)Unit SellingPrice(excl GST)$$$Tennis racquets6416010,240320Cross-Trainers231102,530220Skis172,00034,0004,00046,770Accounting InformationThe business uses the following specialised journals to record its businesstransactions:?????A Sales Journal is used to record the sale of inventory on credit during themonth.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 receivedfor expenses incurred and owing are recorded in the general journal at the timeof receiving the invoice. (Narrations are not required for general journaltransactions.)The business uses a general ledger, an accounts receivable subsidiary ledger and anaccounts payable subsidiary ledger. The 4 column running balance form of ledgeraccount is used.NOTE: There is an extra column in the ledger accounts to make a note of sourcedocument numbers etc. We do not have such information so you may leave thiscolumn blank.Financial statements are prepared at the end of each month. The accounts are alsoclosed off at the end of each month.All necessary pro-formas are available on the Blackboard site and are to be usedto complete the manual accounting practice set. Quick Books software is to beused to prepare computerised records in Part B to ensure they agree.The business transactions that occurred in April 2014 are as follows: 1 Paid rent for April $4,400 with cheque number 46 ($4,000 plus GST$400).April 1 Purchased an Apple MacBook Pro on credit from Insight Computers for$1,342 ($1,220 plus GST $122)April 2 Purchased office supplies with cheque number 47 for $770 ($700 plusGST $70)April 2 Sold 5 pairs of skis on credit to Snowy Resort, invoice number AB32$22,000 ($20,000 plus GST $2,000).April 3 Purchased 40 tennis racquets on credit from Dunlop $ 7,040 ($6,400 plusGST $640).April 4 Paid for prepaid insurance of $1,320 for 12 months effective 1 April($1,200 plus GST $120) with cheque number 48.April 4 Sold 23 pairs of cross-trainers, 6 tennis racquets and 1 pair of skis as acash sale for $12,078 ($10,980 plus $1,098 GST), receipt number C324.April 4 Lauren withdrew $8, 000 cash for her personal use with cheque number49 (no GST is applicable.)April 4 Paid the monthly net wages of the staff of $10,400 with cheque number50 (no GST is applicable.)April 10 Sold 4 pairs skis and 20 tennis racquets on credit to MainstreamAdventures, Invoice Number AB33 $24,640 ($22,400 plus GST $2,240).April 11 Purchased 50 pairs of cross trainers and 5 pairs of skis on credit fromSports Wholesalers $ 17,050 ($15,500 plus GST $1,550).April 14 Paid Premium Accountants the balance owing of $3,850 with chequenumber 51.April 21 Paid Ballistic Sports Equipment $15,400 with cheque number 52 as partpayment of prior month purchases of inventory.April 21 Issued a credit note to Mainstream Adventures for return of 2 tennisracquets, Credit Number 14 $704 ($640 plus GST $64).April 22 Received $15,200 from Dawson Training as payment on account.April 26 Paid the monthly telephone and internet expense with cheque number53 for $275 (GST $25).April 26 Invoiced Dawson Training for 40 tennis racquets, Invoice NumberAB34 for $14,080 ($12,800 plus GST $1,280).April 28 Received $6,000 on account from Indigo Sports Centre.April 28 Returned 5 pairs of cross trainers to Sports Wholesalers and received acredit of $ 605 ($550 plus GST $55).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 representedthe March quarter net GST payable of $12,450 and also the previous monthPAYG tax payable of $5,180 (record each transaction on a separate line).April 30 Received $22,000 from Snowy Resort as payment on account.April 30 Bank statement: Received interest into the bank account $125. (no GSTapplicable)April 30 Bank Statement: Bank charges of $25 (no GST applicable)April 30 Record a general journal entry for $2,590 for the total PAYG tax withheldon the monthly wages. (Debit wages expense and credit PAYG Tax Payable)


Paper#42681 | Written in 18-Jul-2015

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