ACC110 201660 Additional Assessment 

 Value: 100%

 Due date: 14 January 2017

Submission method options: via Turnitin (you will be added to ACC110 AA special class)

BACKGROUND TO THE ASSIGNMENT

Company information

You have just been appointed as Accountant for Sandgate Electronics, a small electronics store that operates in inner city Brisbane, owned by Benny Wang, and you start work on 1 February 2016.

Sandgate Electronics was set up as a company based in Brisbane and derives its main source of revenue from retail sales of electronic goods. Benny Wang (the sole shareholder) is heavily involved in the running of the business. He has also appointed a sales consultant (Jenny Zhang) and an accountant (you) to work at the store on a full-time basis.

Goods and services tax (GST): The company is a registered entity for GST purposes and accounts for GST on an accrual basis. As a small business, Sandgate Electronics pays GST in quarterly instalments and no GST is due to be remitted in the month of February. The prices of goods and services that are subject to GST are quoted inclusive of 10% GST.

Inventories: The business uses the perpetual inventory system and the cost of all inventory sold is 70% of the sales (GST exclusive) price.

The following trial balance provides the closing balances of all accounts as at 31 January 2016 which are also the opening balances of those accounts as of 1 February 2016.

 

Now that you are employed as an accountant for the store, your first task will be to record transactions for the month of February 2016 and derive some financial statements for the business.  Specifically, Mr Wang requests you to use Excel to:

 

  1. Open Ledger accounts (T-Bar format or Running-balance format) for each account in the following Trial Balance as at 31 January 2016, and enter the balances shown in that the Trial Balance as the opening balance in the associated account.
  2. Record the February transactions (listed below) in the General Journal.

Notations/descriptions are required in the general journal entries.

  1. Post the entries from the general journal to the general ledger accounts and enter the posting references in the general journal.
  2. Balance off each general ledger account and prepare a trial balance as at 29 February 2016.
  3. Prepare a Statement of Profit or Loss for the period ending 29 February 2016.
  4. Prepare a Statement of Retained Earnings for the period ending 29 February 2016.
  5. Prepare a Statement of Financial Position as at 29 February 2016.

 

 

PLEASE NOTE

  1. i) When a discount is received or allowed, there is no need to adjust the associated GST Paid or Collected. ii) 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

 

 

Sandgate Electronics
Trial Balance as at 31 January, 2016
Acc.No. Account Debit Credit
1-1110 Bank 86,606
1-1200 Accounts Receivable 39,045
1-1210 Less Provision for Doubtful Debts 781
1-1300 Inventory 135,520
1-1400 Office Supplies 453
1-1500 Prepaid Rent 0
1-3110 Property & Equipment at Cost 54,000
1-3120 Property & Equipment Accum Dep 22,094
2-1200 Accounts Payable 34,526
2-1310 GST Collected 5,416
2-1330 GST Paid 7,106
2-1800 Short Term Loans 0
2-2100 Bank Loans 50,000
3-1110 Share Capital 41,960
3-8000 Retained Earnings 190,557
4-1100 Sales Revenue 99,914
5-1100 Cost of Sales/Cost of Goods Sold 70,220
6-1100 Depreciation Expense 22,194
6-1800 Office Supplies Expense 2,761
6-1930 Salaries Expense 18,012
6-2100 Telephone Expense 3,724
6-2420 Electricity Expense 4,000
6-2500 Bank Charges 43
6-2600 Bad Debts Expense 1,084
9-1000 Interest Expense 480
TOTAL 445,248 445,248

February Transactions:  

 

Date       Transaction description

 

  • Issued Cheque No. 5017 to Office Supplies Warehouse for the purchase of $1,980 (includes 10% GST) worth of equipment.
  • Issued Cheque No. 5018 for $1,430 (includes 10% GST) to Discount Office Supplies for the cash purchase of office supplies.
  • Obtained a loan of $20,000 from Li Wang (a family relative of Benny Wang) at a simple interest rate of 6% per year. The funds were immediately placed in the business’s bank account.
  • Issued Cheque No. 5019 for $7,268 to Telco Ltd in payment for a credit purchase made in the previous month.

6              Received Cheque No. 221 from Hi Tech for $11,248, which is the full amount outstanding on their account.

8             Purchased the following items from WFI Electrical:

– 9 units Bic Phones at $1,177 each (includes 10% GST), and  – 8 units Mieca camera lenses at $1,760 each (includes 10% GST).

Issued Cheque No. 5020 for $7,800 to this supplier for this particular invoice at the time of the purchase, with the remainder being on credit.

10           Sold the following items on credit to Wi-Tronics, Invoice #3532:

– 3 units MX620 notebook computers for $2,420 each (includes 10% GST)  – 4 units ZII game consoles for $2,750 each (includes 10% GST).

$7,500 was received immediately, Cheque No. 642, with the rest due to be received during the last week of the month.

  • Purchased on credit 10 units MX620 notebook computers from Telco Ltd at $1,617 each (includes 10% GST).
  • Made a cash sale to Wi-Tronics, Invoice #3533 for the following items:
    • 5 units MX620 notebook computers for $2,420 each (includes 10% GST).
    • 4 units Mieca camera lenses for $2,640 each (includes 10% GST).

Received Cheque No. 647 for $22,660 from this customer.

  • Sold the following items on credit to Pikea, Invoice #3534:
    • 5 units MX620 notebook computers at $2,420 each (includes 10% GST) – 5 units Bic Phones at $1,760 each, (includes 10% GST) .

16           Purchased 10 units ZII game consoles from Telco Ltd for a price of $1,837 each (includes 10% GST). Issued Cheque No. 5021 for the full payment of this purchase.

20           Issued Cheque No. 5022 for $6,600 (includes 10% GST) to pay The Professionals Property Management for three month’s rent in advance.

22           Sold merchandise on credit to Hi Tech, Invoice #3535. The items sold were: – 3 units Mieca camera lenses for $2,640 each (includes 10% GST)  – 4 units ZII game consoles for $2,750 each (includes 10% GST) .

24           Purchased 8 units Bic Phones for $1,177 each (includes 10% GST), from Xrata Technology on credit.

26           Received $10,760 owing from Wi-Tronics for their purchase on February 10.

28            Paid (Cheque No. 5023) the Sales Consultant’s salary for the month $2,560.                  Paid (Cheque No. 5024) the Accountant’s salary for the month $2,680.

 

 

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