Ms Jennie Smiles is the major shareholder and chief executive officer of Celebrations Pty Ltd, a small business which provides organisation services and supplies for parties, wedding receptions and other happy occasions.
Due to the relatively small size of the business Jennie is unable to justify a computerised accounting system thus all accounting is completed manually by ABC Accounting.
Celebrations Pty Ltd uses a perpetual inventory system, noting the cost of all inventory sold is 65% of the sales (GST exclusive) price.
It is now the end of February 2018 and Jennie requests ABC Accounting to complete all necessary accounting to enable the preparation of a trial balance as at 28 February 2018. As the ABC Accounting accountant assigned to Celebrations Pty Ltd you are requested to complete the following tasks using Excel:
(a) Prepare general journal entries to record the February transactions as identified below. Notations/descriptions are required.
(b) Open general ledger accounts (T-Bar OR Running Balance format) for each account shown on the 31 January 2018 trial balance and
– enter the opening balance (for 1 February 2018) for each account using the balance as shown in the 31 January 2018 Trial Balance.
– Post the entries from the general journal to the general ledger accounts and enter the posting references in the general journal.
(c) Balance off each general ledger account at 28 February and prepare a trial balance as at 28 February 2018.
PLEASE NOTE
- i) When a discount is received or allowed, you are requiredto adjust the associated GST Paid or Collected.
- ii) Should any GST or discount calculations not result in whole $ values, you can round the result to the nearest whole $.
iii) When using Excel you are expected to use the appropriate excel functions including, but not restricted to:
- ‘sum’
- Bordering
- Cell merging
- Wrap text
- Correct alignment of numbers and text
- Correct identification of values as $ amounts
- Correct ruling off of totals
- Correct use of ‘bordering’ to ensure columns are clearly distinguished from each other.
- iv) Prior to commencing this assignmentplease ensure you have read the following from the subject’s Interact Resources site:
- Assessment Item 2 folder – a voice over powerpoint, a further guidance document, and an Excel template.
- Other Topic Resources
- Topic 1 Journal Posting Illustrations.
- Topic 2 Inventory Journal Examples including GST
- Topic Review Notes
- Topic 1.1 Online Meeting Notes
- Topic 1.2 Online Meeting Notes
- Topic 2 Online Meeting Notes
Ms Smiles has provided a list of the transactions which occurred during the month of February, as well as the business’s trial balance as at 31 January, 2018.
The transactions for February 2018 were as follows:
| Date (2018) | Transactions |
| 1 February | Sold inventory on credit to Wendy’s Parties $3,300 (GST inclusive). Terms 3/7, n/30. Invoice No 1101. |
| 2 February | Received $2,570 commission owing from parties organised in January. Issued Receipt No. 350. |
| 3 February | Paid Party Supplies $2,760 (Cheque No. 201), after receiving a discount of $88, the amount owing for the purchase of inventory on credit in January. |
| 4 February | Cash purchase of office supplies from Discount Office Supplies $1,320 (GST inclusive). Cheque No. 202. |
| 5 February | Issued a $330 (GST inclusive) credit to Wendy’s Parties for unsuitable inventory returned. |
| 6 February | Received $1,320 (Cheque No. 1020), after allowing a discount of $33, from V. Weeke as payment for a credit sale of inventory made in January. Issued receipt No. 351. |
| 7 February | Paid Party Outfits $965 (Cheque No. 203) owing from a January purchase of inventory. |
| 7 February | Received $2,881 from Wendy’s Parties being payment for the February 1 sale of inventory. Issued Receipt No. 352. |
| 8 February | Cash sale of inventory $1,210 (GST inclusive). Issued Receipt No. 353. |
| 9 February | Paid Prime Real Estate Pty Ltd $825 (GST inclusive) for February rent. Cheque No. 204. |
| 10 February | Purchased inventory on credit from Weddings R’US $2,860 (GST inclusive). Terms 2/7, n/30. |
| 11 February | Obtained a loan of $15,000 from Aunty Phyllis. Principal and interest of 5% pa is to be paid by August 31, 2018. The proceeds were immediately deposited into the bank. NB: there is no need to make allowance for interest payable. |
| 12 February | Returned unsuitable inventory $429 (GST inclusive) to Weddings R’US. |
| 13 February | Sold inventory on credit to Australiana Entertainers $1,320 (GST inclusive). Terms 2/7, n/30. Invoice No 1102. |
| 14 February | Purchased inventory on credit from Party Outfits $1,870 (GST inclusive). Terms 2/7, n/30. |
| 17 February | Paid $2,382 (Cheque No. 205) owing to Weddings R’US for the February 10 purchase of inventory. |
| 19 February | Purchased inventory from Nuptial Supplies $1,430 (GST inclusive). Paid $800 by cheque (No. 206) as part payment. The remainder of the purchase was on credit. |
| 20 February | Received $1,294 owing from Australiana Entertainers, the amount owing on the February 13 sale of inventory. Issued Receipt No. 354. |
| 22 February | Cash purchase on inventory $550 (GST inclusive). Cheque No. 207. |
| 24 February | Sold inventory on credit to Blinky Bill $1,430 (GST inclusive). Terms 2/7, n/30. Invoice No. 1103. |
| 26 February | Paid monthly electricity account to Origin Power $979 (GST inclusive) by cheque (No. 208). |
| 28 February | Issued Cheque No. 209 for $1,980 to pay sales consultant’s salary. |
| 28 February | The current month’s interest $144 on the bank loan was paid to BAN bank via a direct debit to the business’s bank account. |
| 28 February | The current month’s bank charges of $23 was paid via a direct debit to the business’s bank account |
Note: No end of month adjusting entries are required.
| Celebrtaions Pty Ltd
Trial Balance as at 31 January 2018 |
|||
| Acc. No. | Account | Debit $ | Credit $ |
| 1-100 | Bank | 39,000 | |
| 1-200 | Accounts Receivable | 15,680 | |
| 1-210 | Provision for Doubtful Debts | 1,850 | |
| 1-300 | Commission Receivable | 2,570 | |
| 1-400 | Inventory | 17,510 | |
| 1-500 | Equipment | 13,700 | |
| 1-510 | Equipment – Accumulated depreciation | 3,560 | |
| 1-600 | Office Supplies | 2,320 | |
| 2-100 | Accounts Payable | 6,880 | |
| 2-110 | GST Collected | 7,230 | |
| 2-120 | GST Paid | 4,980 | |
| 2-200 | Short Term Loans | 0 | |
| 2-300 | Bank Loans | 23,500 | |
| 3-100 | Capital | 30,000 | |
| 3-200 | Retained Earnings | 29,398 | |
| 4-100 | Sales Revenue | 62,350 | |
| 4-110 | Sales Returns & Allowances | 1,350 | |
| 4-200 | Commissions Revenue | 12,640 | |
| 4-300 | Discount Received | 1,200 | |
| 5-100 | Cost of Sales | 43,645 | |
| 6-100 | Office Supplies Expense | 2,200 | |
| 6-200 | Discount Allowed | 1,360 | |
| 6-300 | Salaries Expense | 17,100 | |
| 6-400 | Electricity Expense | 5,200 | |
| 6-500 | Rent Expense | 6,300 | |
| 6-600 | Depreciation Expense | 4,520 | |
| 6-700 | Interest Expense | 1,008 | |
| 6-800 | Bank Charges | 165 | |
| $178,608 | $178,608 | ||
Rationale
This assessment task covers topics 1 and 2, and has been designed to ensure you understand the double entry accounting system prior to undertaking the online Perdisco MYOB Practice Set (ie assessment Items 3 and 4). More specifically it seeks to assess your understanding of the double entry accounting system and to assess your ability to analyse and record accounting transactions using a manual accounting information system, as well as to prepare a trial balance from accounting data.
Presentation
The assignment should be presented as a professional piece of work – as if you were presenting it to your employer. Refer to the marking criteria for details on what is expected. Marks will be deducted (up to a maximum of 20% of the total marks awarded) for poor presentation.
Requirements
Your assignment is to be completed using Excel, noting the assignment will be marked and returned to you online.
The assignment is to be submitted via Turnitin and is to consist of ONE Excel file only. Please also note you are not required to include any referencing in this assignment.
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