Adrian Lee recently purchased a carpet business. Since then, the business has grown into a successful importer and seller of fine carpets and rugs. AAA Carpets and Rugs (ABN 65 111 177 778) is situated at 133 Clare Street, Sydney, 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 local carpet and rug businesses. Goods and Services Tax AAA Carpets and Rugs (AAA) is regeistered 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, Anna Anatolia and Alex Arak. They are both paid an hourly rate of $30 per hour. They are each owed for 10 hours work undertaken for the last week in August. Note: Do not use the employee section of Xero; record the wages expense as a cash payment.

ACC10008 assignment, semester 2, 2023 Page 2 of 8 Inventory The folllowing is a list of inventory on hand and suppliers at 31 August 2023: Quantity On hand Item code Item description Cost price 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 iterms 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 AAA Carpets also offer the additional services to customers cleaning and repairing carpets. Revenue from Cleaning and Repairs is recorded separately from the sale of carpets. Cleaning: AAA Rugs and Carpets will charge a fee of $75 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 $90 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 16 111 199 990 47 Browns St., Mainsville, NSW 20154 net 30 days 10 August $5 500 Oriental Carpets 74 222 233 334 112 High St., Melbourne VIC 3008 net 30 days 20 August $24 200 Taba Tabai 55 222 288 889 77 Sunset Rd., Darwin, NT 8012 net 30 days 22 August $11 990

ACC10008 assignment, semester 2, 2023 Page 3 of 8 Customer information Name & ABN number Address Date of last invoice Account balance Raver Rugs 27 222 266 667 90 Srinagar Rd., Brunswick Vic 3056 22 August $3 410 Cairo Carpets 84 111 122 223 Chodor Cres., Thomastown Vic 3074 25 August $3 707 Sorel Interiors 65 111 177 779 11 Main Street Kew Vic 3101 27 August $2 990 Terms of payment are net 30 days from the date of the invoice. All cash sales are given a discount of 5%. Bank loan AAA Rugs and Carpets borrowed $24 000 from Eastern Bank for the business. Monthly loan payments total of $2 125 which is paid to Eastern Bank comprising of $1 500 principal and $625 interest. Prepaid Advertising AAA Rugs and Carpets paid for a seven-month advertisement on 1 August for $1 540 (including GST) in the Leader newspapers. The advertisement appears in numerous local Leader newspapers throughout the city. Trial Balance as at 31 August 2023 $ $ 600 Bank account* 28 093 610 Accounts Receivable 10 107 620 Prepaid expenses 1 200 630 Inventory 25 350 635 Cleaning materials 670 710 Delivery van 28 000 711 Accumulated depreciation-delivery van 1 380 720 Shop fittings 4 500 721 Accumulated depreciation-shop fittings 1 600 800 Accounts Payable 41 690 805 Wages payable 600 815 Electricity expense payable 310 820 Net GST Payable 2 140 825 Loan-Eastern Bank 18 500 910 Owners capital-Adrian Lee 31 700 Total 97 920 97 920 *Eastern Bank: BSB 117288, account number 854742

ACC10008 assignment, semester 2, 2023 Page 4 of 8 Transactions September 1 Paid Prime Real Estate rent of $8 910 (GST inclusive) for period 1 September to 30 November June 2023 [chq 309]. 2 Credit sale to Sorel Interiors: 2 Tabriz carpets & 2 Nineveh rugs [invoice 411]. AAA Carpets and Rugs charged $50 for delivery to Sorel Interiors. 2 Paid for printing to Officeworks (GST inclusive) [chq. 310] $473. Paid fuel and other delivery van expenses to GP Motors, 281.60 (GST inclusive) [chq. 311]. 3 Credit purchase of 5 Nineveh rugs [Purchase order 624]. Purchased electronic cash register from Retail Electrical Supplies for $8 690 (including GST) paying $1 500 and paying remainder to Retail Electrical Supplies over 2 years. [chq 312] The cash register is expected to have a useful life of 8 years with a nil residual value. 3 Sorel Interiors paid the balance owing on 1 September. 4 Paid Tru energy the accrued electricity expense owing [chq.313]. 4 Credit sale to Raver Rugs: 3 Akstafa rugs, 3 Manluk hall runners, 2 Nineveh rugs [Invoice 412]. 5 Credit purchase from Persian Imports: 5 Akstafa rugs, 6 Manluk hall runners [P.O. 625]. 6 AAA Carpets and Rugs paid Persian Imports the balance owing at 1 September [chq 314]. 6 Credit purchase of 6 Tabriz carpets [P.O. 626]. 7 Paid Anna Anatolia for 20 hours worked plus the amount owing on 1 September; paid Alex Arak 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 74 222 233 334), $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 Manluk hall runners, 1 Nineveh rug, 2 Tabriz carpets [Invoice 413]. 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 and received a 5% discount [chq 318]. Note: In Xero record the discount as a credit note. 10 Adrian withdrew $1 000 for personal use [chq 319]. 11 Paid Persian Imports for inventory purchased on 5 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 [P.O. 627]. 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 and receives a full credit for the damaged carpet.(purchased 12 September). 15 Paid Anna Anatolia and Alex each for 20 hours worked [chqs. 321 & 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 [Invoice 414]. 16 Paid Taba Tabai the balance owing at 1 September and for inventory purchased on 6 September

ACC10008 assignment, semester 2, 2023 Page 5 of 8 [chq. 324]. 17 Credit sale to Raver Rugs: 2 Akstafa rugs, 3 Tabriz carpets [Invoice 415]. 17 AAA Carpets and Rugs received payment for 6 hours cleaning and 6 hours for repairs. 18 Paid delivery van expenses to GP Motors, $341 (GST inclusive) [chq. 325]. 19 Credit purchase of 8 Akstafa rugs [P.O. 628]. 20 Credit sale to Raver Rugs: 4 Akstafa rugs, 5 Manluk hall runners, 1 Tabriz carpet [Invoice 416]. 20 Cairo Carpets paid for inventory purchased on 15 September. 21 Paid the GST outstanding on 1 September [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 [Invoice 417]. AAA Carpets and Rugs charged $50 for delivery to Cairo 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 [P.O. 698]. 27 Cairo Carpets paid for inventory purchased on 24 September and received a discount of 5%. Cash sales: 1 Tabriz carpet and 1 Manluk hall runner [Invoice 418]. 28 Received a 10% deposit for a Ninevah rug from a new customer, Harry Morgan to be delivered in October 2023. The transaction excludes GST. 29 Received payment from Raver Rugs for inventory sold 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 purchased more cleaning materials on account for $217.80 (GST inclusive). [chq. 329]. 30 The bank statement for September shows that bank fees of $34 had been charged to AAA Carpets and Rugs. Adjustments at 30 September: The delivery van is depreciated at 15% per year straight line depreciation. Shop fittings are depreciated at 10% per year straight line depreciation. Wages owing at 30 September: Ana 10 hours, Alex 10 hours Interest income receivable is $120 Cleaning materials on hand at 30 April 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 3 o Nineveh rugs 8 o Tabriz carpets 6

ACC10008 assignment, semester 2, 2023 Page 6 of 8 Required: Part A: Manual recording 1. Record the opening balances and transactions for September in the appropriate general or general and/or special journal/s for and post all transactions from journals to the general ledger in accordance with accounting procedures. 2. Prepare schedules of accounts receivable, accounts payable and inventory as at 30 September 2023 and reconcile these with the control accounts in the general ledger. 3. Record end of month adjustments in the general journal and post these to the general ledger.