ACC10008 Financial Information Systems.
General information
Adrian Ariel recently purchased a carpet business for $100,000. Since then, the business has grown into a successful importer and seller of fine carpets and rugs. AAA Carpets and Rugs (ABN 65 992 718 643) is situated at 133 Clare Street, Boydtown, Melbourne, Vic 3957.
AAA Carpets and Rugs purchase their inventory from a number of suppliers. In addition to sales to individual customers the business also supplies some local carpet and rug businesses.
Goods and Services Tax
AAA Carpets and Rugs (AAA) is registered for GST and charges charges on all inventory sales and services provided to customers and pays GST on inventory purchases and most business expenses. Non-current asset acquisitions also incur GST. The rate of GST is 10%.
Employees
AAA Carpets and Rugs employs two university students on a casual basis, Ashana Anatolia anfd Andrew Arak. They are both paid an hourly rate of $25 per hour. They are both owed $200 each at 1 September.
Note: Do not use the employee section of Xero; record the wages expense as a cash payment.
ACC10008 assignment, semester 2, 2018 Page 2 of 6
Inventory
The following is a list of inventory on hand and suppliers at 31 August 2018: Quantity On hand Item code Item description Last Cost price Last Sale price Supplier
5
AR
Akstafa rug
500
750
Oriental Carpets
6
MHR
Manluk hall runner
350
550
Persian Imports
8
NR
Nineveh rug
2,200
2,990
Persian Imports
5
TC
Tabriz carpet
630
870
Taba Tabai
Each of the above items of inventory are shown as excluding GST.
The inventory is purchased on credit under the terms of payment required by the suppliers.
Once an order is placed the supplier will deliver the inventory the same day.
AAA Carpets and Rugs uses the perpetual system and the first-in-first out method to record inventory transactions.
Other services
Adrian and Andrea offer the additional services to customers. Revenue from Cleaning and Repairs is recorded separately.
Cleaning:
AAA Rugs and Carpets will charge a fee of $70 per hour (excluding GST) for the specialised cleaning of antique and old rugs and carpets. Terms of payment are strictly cash at the time the service is provided.
Repairs:
AAA Rugs and Carpets offers a repair service for a fee of $50 per hour (excluding GST). Terms of payment are strictly cash at the time the service is provided.
Supplier information Name & ABN number Address Terms Last invoice date Account balance
Persian Imports
50 566 722 363
47 Browns St.,
Mainsville, NSW 20154
net 30 days
10 Aug
$5,500
Oriental Carpets
54 343 454 987
112 High St.,
Melbourne VIC 3008
net 30 days
20 Aug
$24,200
Taba Tabai
45 222 422 765
77 Sunset Rd.,
Darwin, NT 8012
net 30 days
22 Aug
$11,990
ACC10008 assignment, semester 2, 2018 Page 3 of 6
Customer information Name & ABN number Address Date of last invoice Account balance
Raver Rugs
45 787 222 123
90 Srinagar Rd.,
Brunswick Vic 3056
22 Aug.
$3,410
Cairo Carpets
33 454 555 321
Chodor Cres.,
Thomastown Vic 3074
25 Aug.
$3,707
Sorel Interiors
62 444 333 543
11 Main Street
Kew Vic 3101
27 Aug.
$2,990
Terms of payment are net 30 days from the date of the invoice.
All cash sales are given a discount of 5%. (Note: this is not a trade discount)
Bank loan
AAA Rugs and Carpets borrowed $80,000 from Eastern Bank for the business. On the last day of each month a total of $2,125 is paid to Eastern Bank for the loan which comprises $1,500 principal and $625 interest.
Prepaid Advertising
AAA Rugs and Carpets paid for a seven month advertisement on 1 August for $770 (including GST) in the Leader newspapers. The advertisement appears in numerous local Leader newspapers throughout the city.
Trial Balance as at 31 August 2018
$
$
600
Bank account
28,493
610
Accounts Receivable
10,107
620
Prepaid expenses
600
630
Inventory
25,350
640
Cleaning materials
670
710
Van
28,000
711
Accumulated depreciation-van
1,380
720
Shop fittings
4,500
721
Accumulated depreciation-shop fittings
1,600
800
Accounts Payable
41,690
805
Wages payable
400
810
Electricity expense payable
310
820
Net GST Payable
2,140
830
Loan-Eastern Bank
18,500
880
Owners capital-Adrian Ariel
31,700
Total
97,720
97,720
ACC10008 assignment, semester 2, 2018 Page 4 of 6
September transactions
Sept.
1
Paid Prime Real Estate rent of $6,600 (GST inclusive) for September and October [chq 309]
2
Credit sale to Sorel Interiors: 2 Tabriz carpets & 2 Nineveh rugs.
2
Paid for printing to Officeworks (GST inclusive). [chq. 310] $473
Paid fuel and other motor vehicle expenses to GP Motors, 281.60 (GST inclusive).[chq. 311]
3
Credit purchase of 5 Nineveh rugs.
3
Sorel Interiors paid the balance owing on 1 September.
4
Paid Tru energy the accrued electricity expense owing.[chq.312]
4
Credit sale to Raver Rugs: 3 Akstafa rugs, 3 Manluk hall runners, 2 Nineveh rugs.
5
Paid Mason Stewart $1,540 (GST inclusive) for a new cash register. It is estimated that the cash register will have an effective life of 10 years with nil residual value.[chq.313]
5
Credit purchase from Persian Imports: 5 Akstafa rugs, 6 Manluk hall runners.
6
AAA paid Persian Imports the balance owing at 1 September.[chq 314]
6
Credit purchase of 5 Tabriz carpets.
7
Paid Ashana Anatolia and Andrew Arak each for 15 hours worked plus the amount owing at 1 September.[chqs. 315 & 316]
7
AAA Carpets and Rugs purchased cleaning materials on credit from Klean King (ABN 72 344 521 211), $308 (GST inclusive). Klean King requires payment terms of net 30 days. This is recorded in a separate account to the purchase of inventory.
8
Cash sales: 2 Mamluk hall runners, 1 Nineveh rug, 2 Tabriz carpets.
9
Paid monthly loan repayment to Eastern Bank. AAA Carpets and Rugs paid an additional $1,000 off the loan principal. [chq. 317]
10
Paid Oriental Carpets the balance owing at 1 September. [chq 318]
10
Adrian withdrew $1,000 for personal use.[chq 319]
11
Paid Persian Imports for inventory purchased on 3 September.[chq 320]
11
AAA Carpets and Rugs received payment for 9 hours cleaning and 14 hours for repairs.
12
Raver Rugs paid the balance owing at 1 September.
12
Credit purchase of 7 Manluk hall runners and 6 Ninevah rugs.
13
Received payment from Cairo Carpets for balance owing at 1 September.
14
Adrian notices that 1 Manluk hall runner is damaged and returns it to the supplier, Persian Imports and receives a full credit for the damaged carpet.
15
Paid Ashana Anatolia and Andrew Arak each for 20 hours worked.[chqs. 321 7 322]
15
Paid telephone expenses of $572 (GST inclusive) to Telstra.[chq 323]
15
Credit sale to Cairo Carpets: 3 Akstafa rugs, 3 Nineveh rugs, 3 Manluk hall runners.
16
Paid Taba Tabai the balance owing at 1 September and for inventory purchased on 6 September. [chq. 324]
17
Credit sale to Raver Rugs: 2 Akstafa rugs, 3 Tabriz carpets.
17
Cash sales – received payment for 6 hours cleaning and 6 hours for repairs.
18
Paid motor vehicle expenses to GP Motors, $341 (GST inclusive).[chq. 325]
19
Credit purchase of 8 Akstafa rugs.
20
Credit sale to Raver Rugs: 4 Akstafa rugs, 5 Manluk hall runners, 1 Tabriz carpet.
20
Cairo carpets paid for inventory purchased on 15 September.
ACC10008 assignment, semester 2, 2018 Page 5 of 6
21
Paid the GST outstanding on 1 September 2018.[chq. 326]
22
Raver Rugs paid for inventory purchased on 4 September.
24
Paid Persian Imports $20,000.[chq. 327]
24
Credit sale to Cairo Carpets: 4 Akstafa rugs, 3 Nineveh rugs, 2 Tabriz carpets.
25
AAA Carpets and Rugs received payment for 18 hours cleaning and 12 hours for repairs.
26
Cairo Carpets returned 2 Akstafa rugs. These were undamaged and returned to inventory.
26
Credit purchase of 6 Tabriz carpets.
27
Cairo Carpets paid for inventory purchased on 24 September.
28
Cash sales: 1 Tabriz carpet, 1 Manluk hall runner.
29
Received payment from Raver Rugs for inventory purchased on 17 September.
30
Adrian withdrew $1,000 for personal use.[chq 328]
30
AAA Carpets and Rugs paid Klean King for cleaning materials purchased on credit and purchases more cleaning materials on account for $217.80 (GST inclusive). [chq. 329]
30
The bank statement for September shows that bank fees of $34 have been charged to AAA Carpets and Rugs.
Adjustments at 30 September:
The van is depreciated at 15% per year straight line depreciation
Shop fittings and cash register are depreciated at 10% per year straight line depreciation
Wages owing at 30 September: Ashana 10 hours, Andrew 10 hours
Interest income receivable is $120
Cleaning materials on hand at 30 September is $410
A physical stock take at 30 September showed the following items of inventory were on hand:
o Akstafa rugs 4
o Manluk hall runners 4
o Nineveh rugs 7
o Tabriz carpets 5
Required:
Part A: Manual recording
1. Record the opening balances as at 1 September 2018 in the general journal and appropriate general ledger accounts and the opening balances of accounts receivable, accounts payable and inventory in the appropriate subsidiary ledgers.
2. Record the transactions in the appropriate general or special journal for September 2018. Post all transactions from journals to the general ledger in accordance with accounting procedures.
3. Prepare schedules of accounts receivable, accounts payable and inventory as at 30 September 2018 and reconcile these with the control accounts in the general ledger.
4. Record end of month adjustments in the general journal and post these to the general ledger.
ACC10008 assignment, semester 2, 2018 Page 6 of 6
5. Prepare a Trial Balance before and after end of month adjustments as at 30 September 2018
6. Prepare an Income Statement for March 2018 and a Balance Sheet as at 30 September 2018.
7. Prepare closing entries for September 2018.
8. Prepare a Trial Balance after closing entries for September 2018.
Transactions must be recorded in the pro-forma journals, ledgers, worksheets and reports available in the assessment folder (excel file).
(marks: 18/30)
Part B Computerised accounts using XERO
1. Download the data file for AAA Carpets and Rugs and enter the conversion balances as at 1 September 2018.
2. Record the transactions for September 2018.
3. Record end of month adjustments.
(marks: 12/30)
(Total marks: 18 + 12 = 30 marks)
ASSIGNMENT SUBMISSION:
Electronic submission via to submissions sub-folder in the assessment folder of the unit home page of
1. Assignment cover sheet (clearly state each group members student id number and full name)
2. Part A: excel file (name the file as ‘your name-AAA Carpets’)
Important Information
1. One assignment only is to be submitted for each group.
1. If the assignment does not satisfy both of the following requirements, it will not be accepted for marking.
a. When establishing the business name for the assignment, students are required to insert their own name after the business name (Refer above). Any assignment with no student name/ names in the company name will not be accepted.
2. The assignment must be accompanied with an assignment cover sheet listing all members’ full name and student identification number.
3. It is the student’s responsibility to keep a backup copy of the assignment until all the assignment process is completed and marks are on blackboard.
4. Any assignments handed in late will be penalised as explained in the unit outline. Please refer to the unit outline for details
