A Wanda's Wardrobes Ltd

Objective:

The objective of this assignment is for you to become familiar with the process of entering transaction data into a manual accounting system, and to test your understanding of accounting concepts and practice.

Assignment overview:

To undertake this assignment, you need to enter the transaction data from the Company Information Sheet into the appropriate journals and ledgers provided, and prepare the requested reports.

In addition, you will be required to complete a reflective journal of your experience as you undertake the assignment.

Working in groups

You are required to work in groups of two on the assignment.

Assignment group members DO NOT need to attend the same workshop group

You need to register your assignment group on MyLO and once you do that you will be assigned a group discussion board and a group submission dropbox will automatically appear on MyLO.

Your completed assignment needs to be uploaded to your group assignment submission dropbox on MyLO by Friday 9 October at midnight.

You need to contact the unit coordinator by Friday 11 September if you have any problems finding a group or signing up to a group on MyLO.

Both group members need to complete ALL parts of the assignment, so I suggest you work together on Zoom or similar, and share your screen as you take turns in complete parts of the assignment in the template.

Part A - Manual Accounting (30 Marks)

Required:

In your group, complete the following tasks for the month of June 2020 for Wanda's Wardrobes Ltd in the following order:

Step 1.

Read the Company Information Sheet carefully and look through the blank accounts

Step 2.

Review the GST information available on MyLO and work through the practice activity

Step 3.

Enter the transactions into the appropriate journals - you are expected to use the general and the special journals provided ie: Sales, Purchases, Cash Receipts and Cash Payments journals.You should put the monthly transactions through the special journals ie: sales will go into the Sales Journal, Purchases in the Purchases journal and so forth. The general journal can be used for any transactions that do not fit naturally into one of the special journals.

Step 4.

Balance the special journals and post the balances for the month from the journals to the subsidiary ledgers, and to the general ledger T accounts. Balance the accounts and prepare a trial balance to check your work. The sum of the debit balance accounts should equal the sum of the credit balance accounts.

Step 5.

Prepare a bank reconciliation at the end of the month, and enter any necessary journal entries to record adjustments to the company records. These entries can be entered into the general journal then posted to the general ledger accounts.

Step 6.

Complete any other adjusting entries in the general journal then post them to the general ledger accounts. Ignore GST for all adjusting entries. Balance the general ledger accounts again, and prepare a pre-closing trial balance.

Step 7.

Prepare closing entries in the general journal then post them to the general ledger accounts. Prepare a post-closing trial balance at 30 June 2020.

Step 8.

Reconcile the control account balances with the subsidiary ledgers.

Step 9

Prepare an Income Statement (Statement of Financial Performance) for the year ending 30 June 2020 and a Balance Sheet (Statement of Financial Position) as at 30 June 2020.

Please Note:

• Each group should submit one copy of Part A to your group submission box on MyLO

• Please provide a brief narration for all entries entered in the general journal and a description for entries in all other journals, as this is what you would do in the real world.

• Each transaction should be entered in ONE journal type ONLY. DO NOT enter transaction in both a special journal and the general journal.Use the general journal for any entries you think don't fit neatly into one of the special journals. Marks will be deducted if you enter each entry in more than one journal type.

• GST is included in this assignment to provide you with an opportunity to learn how GST is accounted for when entering transactions in the accounts.You are not expected to know everything about GST, just how to account for transactions with a GST component.

• Marks for Part A will be earned or not according to the extent to which you have the correct final account balances shown in the trial balances, prepared the required financial reports, and completed all the other tasks as required.

• It will not be possible to mark your assignment unless you submit all of the required reports. You can submit the parts of the assignment as separate files in Word or Excel format, but make sure that you check your file(s) before submission, to ensure the accounts and all required reports are readable. DO NOT compress your files before uploading. Do not submit your assignment in PDF format.

Please submit the following for Part A:

When you have entered all transaction data, you should prepare and submit the following reports:

All journals and the full set of general ledger T accounts.

Pre-Closing Trial balances as at 30 June 2020

Post-Closing Trial Balance as at 30 June 2020

Income Statement (Statement of Financial Performance) for the year ended 30 June 2020

Balance Sheet (Statement of Financial Position) as at 30 June 2020

Bank Reconciliation as at as at 30 June 2020

A stock-card to show the movement of inventory in June 2020

Company Information Sheet - Wanda's Wardrobes:

• Wanda's Wardrobes Ltd is a local retail business that sells wardrobes. The business was set up by Wanda who registered the company on 1 July 2014 and issued 150 000 shares.

• The Financial year for the company ends on 30 June.

• Wanda's Wardrobes Ltd use sales, purchases, cash receipts, cash payments journals and a general journal, along with a general ledger and subsidiary ledgers for debtors and creditors. The majority of their customers pay in cash but they do offer credit to a handful of valued customers. Credit sales are on the terms: 5/10, n/30.

• Wanda's Wardrobes Ltd rent a local warehouse paying rent of $1 650 each month (including GST).

• The business uses a perpetual inventory system and applies the FIFO inventory flow assumption. Opening inventory is made up of 75 wardrobes @ $1 000 each.

• The company's warehouse fittings are being depreciated over 10 years with an estimated residual value of $6 500.The company has two delivery vans which are being depreciated over 6 years with an estimated combined residual value of $8 500.

• This new loan was taken out on the 31^st May and loan payments of $1 000 per month plus interest will be made monthly with the first payment due on the 1^st July 2020. Interest is to be paid at a rate of 7% per annum. The first month's interest is to be calculated on the full value of the loan of $60 000.

• Provision for doubtful debts is always adjusted at the end of each month to equal 4% of the value of debtors at that time.

• The company account for GST on an accrual basis and reconcile and pay GST every quarter.All figures are GST inclusive unless otherwise stated, thus you will need to divide each figure by 11 to identify the GST component.

• GST was last paid in April 2020 and was next due to be paid in July 2020 thus you DO NOT need to reconcile or pay GST at the end of June 2020 for the quarter.This will be done by the accountant in July.

• Gross wages represent the total wages expense. Tax taken from wages needs to be treated as "Tax Payable" ie: Gross wages = net wages paid + PAYG Tax Payable

• Round all amounts to the nearest dollar.

The trial balance of the company at 31 May 2020 was as follows:

Wanda's Wardrobes Ltd

Trial Balance

as at 31 May 2020

DRCR

100Cash at bank160 550

101Debtors control14 800

102Provision for doubtful debts592

103Inventory75 000

104Warehouse Fittings80 300

105Accumulated depreciation - W/H Fittings14 145

106Motor Vehicles (Delivery Vans)62 500

107Accumulated depreciation -m/vehicles 9 000

200Creditors control16 200

250Accrued Expenses7 980

260Loan60 000

300Share capital200 000

310Retained profits97 125

400Sales Revenue589 518

401Sales returns3 900

402Discount revenue5 850

500Cost of goods sold330 500

501Depreciation Expense - W/H Fittings6 765

502Depreciation Expense - M/V8 250

503Discount expense2 620

504Electricity expense11 200

505Income Tax expense60 000

506Interest expense4 125

507Motor Vehicle expenses7 500

508Rent expense16 500

509Sundry expenses5 200

510Telephone expense2 250

511Wages expense151 000

600GST Collected9 100

610GST Paid6 550

$1 009 510$1 009 510

Schedule of Debtors Schedule of Creditors

as at 31 May 2020as at 31 May 2020

Red Ltd 2 400Melon Ltd1 300

Amber Ltd3 200Plum Ltd7 600

Jade Ltd1 700Pineapple Ltd1 900

White Ltd7 500Yack Ltd5 400

$14 800$16 200

The following transactions occurred in June 2020:

(All figures are inclusive of GST unless otherwise stated)

June1Received a cheque for $2 200 from Red Ltd (no discount allowed) as part

payment of their account, and deposited it in the bank account [Hint: GST does not need to be considered when you record this transaction, as GST received would have been recorded at the time of the original sale]

2Sold 3 wardrobes for $6 000 (before discount) to Jade Ltd on credit, the

company was also given a trade discount of $500, then the normal credit

terms) [Hint: Sale = $5 000; GST Collected = $500; COGS/Inventory =

$3 000]

4Purchased 10 wardrobes on credit from Pineapple $12 100 (no discount)

5Paid Yack $5 200 in full settlement of amount owing, chq no. 252(the business was given a settlement discount for the difference)

8Received and deposited payment in full from White Ltd (no discount

allowed)

11Sold 10 wardrobes on credit to White for $22 000

12Paid Pineapple Ltd $3 495, being part payment of account owing to date, chq no. 253

12Paid telephone account of $825, chq no. 254

14Received a cheque for $5 500 from White Ltd in part payment of their

account (no discount allowed)

14Banked cash sales of 25 wardrobes sold for a total of $51 150

14Withdrew cash from the bank account to pay wages of $3 900(after PAYG

tax, gross wages were $5 900 (wages before tax).

17Paid $462 for plastic bags and stationery items, chq no.255

18Sold 2 wardrobes credit to Amber Ltd $3 564

23Paid Melon Ltd $ 1 300, chq no. 256

Paid sundry expenses of $250, chq no. 257

Wrote off the balance of the account owed by Red Ltd as a bad debt

28Deposited Cash from sales of 15 wardrobes of $30 800

Withdrew cash from the bank to pay wages of $4 300, gross wages were

$6 200.

29Purchased 4 wardrobes on credit from Pineapple Ltd of $5 380 (before discount) The business was allowed a trade discount of $100 and terms of 1/10, n/30

30Banked cash sales from the sale of 3 wardrobes for a total of $7 700

30Amber Ltd paid their debt in full by cash (no discount allowed).

30Paid the rent for June, chq 258

Additional information at the end of the month:

Ignore GST for all adjusting entries.

Gross wages owing at the end of the month total $5 000 (no PAYG tax payable)

Electricity owing for the month of June is $500 (no GST)

Advertising owing for the month was $500 (no GST)

Income tax for the month of June 2020 is estimated to be $8 200 (no GST)

On the last day of the month (30 June) the business traded both of the delivery vans in for two larger vans worth $120 000 in total(GST free - no GST). They were given a trade in of $60 000 on the old vans, with the balance to be paid in 30 days. The new vans depreciation rate and residual value have not yet been determined

No entries had been made in the accounts to allow for any of these items yet

The bank statement received at the end of June shows the following information:

Bank Statement

Wanda's Wardrobes Ltd

2020DebitCreditBalance

June1Balance160 000CR

Deposit4 800164 800CRDeposit2 200167 000CR

3Chq.no. 2003500163 500CR

4Chq.no. 201750162 750CR

8Chq. no. 2525 200157 550CR

Deposit7 500165 050CR

14Chq. no. 2533 495161 555CR

14Deposit5 500167 055CR

14Deposit51 150218 205CR

14Chq. no. 254825217 380CR

14Cash withdrawal3 900213 480CR

19Chq. no. 255462213 018CR

27Chq. no. 2561 300211 718CR

29Deposit30 800242 518CR

30Cash withdrawal4 300238 218CR

30Bank fees/charges35238 183CR

30Dividend Received1 500239 683CR

At 31 May 2020 there were two outstanding cheques - cheque no. 200 for $3 500 and cheque no. 201 $750 and an outstanding deposit for $4 800.