Alberto Holland is the owner of Perfecto Coffee, a specialty coffee machine business he started two years ago.Alberto sells 2 types of coffee machines that he purchases from manufacturers. He operates the business himself and employs one person full-time as an assistant. Alberto also provides specialty barista training services to private clients on how to make perfect coffee.

Income Statement for the month ended 30th November Statement of Changes in Equity for the month ended 30th November Balance Sheet as at 30th November Assets Liabilities General Ledger Cash at Bank Date Details Post ref Debit Accounts Receivable Date Details Post ref Debit Allowance for Doubtful Debts Date Details Post ref Debit Prepaid Insurance Date Details Post ref Debit Prepaid Rent Date Details Post ref Debit Office Supplies Date Details Post ref Debit Inventory Date Post ref Debit Details Delivery Van Date Details Post ref Debit Accumulated Depreciation - Delivery Van Date Details Post ref Debit Accounts Payable Date Details Post ref Debit Wages Payable Date Details Post ref Debit GST Clearing Date Details Post ref Debit Superannuation Payable Date Details Post ref Debit Capital Date Details Post ref Debit Drawings Date Details Post ref Debit Income Summary Date Details Post ref Debit Sales Revenue Date Details Post ref Debit Sales Discounts Date Details Post ref Debit Service Revenue Date Details Post ref Debit Interest Revenue Date Details Post ref Debit Cost of Sales Date Details Post ref Debit Bad Debts Expense Date Details Post ref Debit Bank Charges Date Details Post ref Debit Depreciation Expense - Delivery Van Date Details Post ref Debit Electricity and Gas Expense Date Details Post ref Debit Insurance Expense Date Details Post ref Debit Office Supplies Expense Date Details Post ref Debit Rent Expense Date Details Post ref Debit Superannuation Expense Date Details Post ref Debit Wages Expense Date Details Post ref Debit Credit Account Number: 110 Dr Cr Credit Dr Credit Account Number: 121 Dr Cr Credit Dr Credit Account Number: 140 Dr Cr Credit Dr Credit Account Number: 160 Dr Cr Account Number: 120 Cr Account Number: 130 Cr Account Number: 150 Cr Credit Account Number: 180 Dr Cr Credit Dr Account Number: 181 Cr Credit Dr Account Number: 200 Cr Credit Dr Account Number: 220 Cr Credit Account Number: 230 Dr Cr Credit Dr Credit Account Number: 300 Dr Cr Credit Account Number: 310 Dr Cr Credit Dr Account Number: 250 Cr Account Number: 350 Cr Credit Dr Account Number: 410 Cr Credit Dr Account Number: 412 Cr Credit Account Number: 415 Dr Cr Credit Account Number: 420 Dr Cr Credit Dr Credit Account Number: 512 Dr Cr Credit Account Number: 515 Dr Cr Account Number: 500 Cr Credit Account Number: 521 Dr Cr Credit Account Number: 530 Dr Cr Credit Account Number: 540 Dr Cr Credit Dr Account Number: 560 Cr Credit Dr Account Number: 565 Cr Credit Dr Account Number: 570 Cr Credit Account Number: 590 Dr Cr General Journal Date Details Date ADJUSTING ENTRIES Details Post ref Page 12 Post ref Date CLOSING ENTRIES Details Page 13 Post ref Debit Credit Debit Credit Debit Credit Worksheet A/C No Account Name 110 Cash at Bank 120 Accounts receivable 121 Allowance for Doubtful Debts 130 Prepaid Insurance 140 Prepaid Rent 150 Office Supplies 160 Inventory 180 Delivery Van 181 Accumulated Depreciation - Delivery Van 200 Accounts Payable 220 Wages Payable 230 GST Clearing 250 Superannuation Payable 300 Capital 310 Drawings 350 Income Summary 410 Sales Revenue 412 Sales Discounts 415 Services Revenue 420 Interest Revenue 500 Cost of Sales 512 Bad Debts Expense 515 Bank charges 521 Depreciation Expense - Delivery Van 530 Electricity and Gas Expense 540 Insurance Expense 560 Office Supplies Expense 565 Rent Expense 570 Superannuation Expense 590 Wages Expense Profit/(loss) Unadjusted Trial Balance Dr Cr Adjustments Dr Cr Adjusted Trial Balance Dr Cr Income Statement Dr Cr Balance Sheet Dr Cr Post closing Trial Balance 30th November A/C No Account Name 110 Cash at Bank 120 Accounts receivable 121 Allowance for Doubtful Debts 130 Prepaid Insurance 140 Prepaid Rent 150 Office Supplies 160 Inventory 180 Delivery Van 181 Accumulated Depreciation - Delivery Van 200 Accounts Payable 220 Wages Payable 230 GST Clearing 250 Superannuation Payable 300 Capital Dr Cr Purchases Journal Date Account credited Page 7 Terms Post ref. Credit Accounts payable Inventory Delivery Van Debits Other: Account title Post ref. s Amount GST Sales Journal Date Invoice no. Page 9 Account debited Post ref. Debit Accounts Receivable Sales Revenue Credit Services Revenue GST Cost of sales Dr. Inventory Cr. Cash Payments Journal Date Chq. No. Page 5 Account debited Post ref. Debits Other accounts GST Net Accounts payable Credits Inventory GST Credits Inventory Net Cash Cash Receipts Journal Page 4 Debits Sales discounts Date Cash GST Net Credits Sales Revenue Accounts receivable GST Net Other accounts Post Account title ref. Amount GST Cost of sales Dr. Inventory Cr. Schedule of Subsidiary Ledger balances Schedule of Accounts Receivable as at 30th November Account Name Amount Schedule of Accounts Payable as at 30th November Account Name Amount Accounts Receivable Subsidiary Ledger H. Proctor Date Details Invoice No Post ref Debit Credit Balance Cayden's Cofffee Club Date Details Invoice No Post ref Debit Credit Balance Accounts Payable Subsidiary Ledger Arabica Pty Ltd Date Details Invoice No Post ref Debit Credit Balance Crema Supplies Pty Ltd Date Details Invoice No Post ref Debit Credit Balance Holland Autos Date Details Invoice No Post ref Debit Credit Balance Inventory Cards Espresso Sprint Date Particulars Quantity Purchases/Returns Unit cost Total Cost Quantity Cost of Sales Unit cost Total Cost Quantity Inventory on Hand Quantity Purchases/Returns Unit cost Total Cost Quantity Cost of Sales Unit cost Total Cost Quantity Espresso Deluxe Date Particulars Inventory on Hand Inventory on Hand Unit cost Total cost Inventory on Hand Unit cost Total cost 1 Perfecto Coffee 2108AFE Financial Accounting 2 Perfecto Coffee Perfecto Coffee Background and Facts Alberto Holland is the owner of Perfecto Coffee, a specialty coffee machine business he started two years ago. Alberto sells 2 types of coffee machines that he purchases from manufacturers. He operates the business himself and employs one person full-time as an assistant. Alberto also provides specialty barista training services to private clients on how to make perfect coffee. Perfecto Coffee is operated from a rented premise and the business pays rent quarterly in advance. The business has a variety of clients with whom Alberto has built up a strong relationship. He offers them terms of 2/10, net/30. The business uses a FIFO perpetual inventory system (First In, First Out). The business is registered for GST. Business Activity Statements (BAS) are submitted quarterly to the Australia Taxation Office on an accrual basis. Currently, the business uses a manual accounting system but plans to test a MYOB accounting system later in the year. Accounting Information Perfecto Coffee uses the following specialised and general journals to record business transactions. Sales Journal - to Purchases Journal - to Cash Receipts Journal Cash Payments Journal General Journal - to record all invoices issued for sales of inventory record all credit purchases to record all cash received to record all cash payments record all other transactions Perfecto Coffee uses a general ledger in the form of a 4-column running balance (as described on page 22 (page 72) Exhibit 2-13 of Custom Text Chapter 1 (Chapter 2 of original). An Accounts Receivable and Accounts Payable subsidiary ledger is also used in this format. Financial Statements are prepared at the end of each month, and the accounts are closed off at the end of each month. All necessary pro-formas are included and are to be used to complete the manual practice set for November. The assignment can be completed either manually using the Excel templates provided or by computer in Excel. 3 Perfecto Coffee Chart of Accounts and Opening Balances 1st November Account Number 110 120 121 130 140 150 160 180 181 200 220 230 250 300 310 350 410 412 415 420 500 512 515 521 530 540 560 565 570 590 Account Name Cash at Bank Accounts receivable Allowance for Doubtful Debts Prepaid Insurance Prepaid Rent Office Supplies Inventory Delivery Van Accumulated Depreciation - Delivery Van Accounts Payable Wages Payable GST Clearing Superannuation Payable Capital Drawings Income Summary Sales Revenue Sales Discounts Services Revenue Interest Revenue Cost of Sales Bad debts expense Bank Charges Depreciation expense - Delivery Van Electricity and Gas Expense Insurance Expense Office Supplies Expense Rent Expense Superannuation expense Wages Expense Debit Credit 18,835 16,140 646 3000 950 19,000 All account balances at 1st November are normal in nature. 16,995 377 1,045 756 38,106 4 Perfecto Coffee Subsidiary Ledgers Accounts Receivable Subsidiary Ledger As at 1 November Cayden's Coffee Club H. Proctor 4,000 12,140 16,140 Accounts Payable Subsidiary Ledger As at 1 November Arabica Pty Ltd Crema Supplies Pty Ltd 6,765 10,230 16,995 Inventory on Hand As at 1 November Espresso Sprint Espresso Deluxe Units on Hand 40 10 Cost per Unit 320 620 Total 12,800 6,200 $19,000 5 Perfecto Coffee NOVEMBER TRANSACTIONS The transactions for Perfecto Coffee during November are listed below. Note: All amounts are GST-inclusive where applicable. Credit sales are made on credit terms of 2/10, n/30 Round all amounts to the nearest dollar. Date Details 1. November 1 Purchased a delivery van for $33,000 from Holland Autos on credit. Terms are n/60. Invoice number 15448. 2. November 1 Paid insurance for 5 months in advance - $2,200 - chq 71. 3. November 1 Paid Arabica Pty Ltd in full for outstanding account balance at 1 st November - no discounts applicable - chq 72. 4. November 2 Sold 10 Espresso Sprint machines for cash - $6,050. 5. November 6 Purchased office supplies for cash - $330- chq 73. 6. November 9 Received amount owed by Cayden's Coffee Club for July invoices less the discount. 7. November 9 Paid fortnightly wages of $1,760 - chq 74. ($1,383 relates to November wages; $377 relates to the wages accrued for July) 8. November 12 Received payment from H. Proctor for part of the November balance - $2,140. There was no discount allowed. 9. November 14 Purchased 15 Espresso Deluxe coffee machines from Arabica Pty Ltd for $10,395. Terms 3/10, n/30, Inv. 5430. 10. November 15 Sold 17 Espresso Sprint machines to Cayden's Coffee Club for $10,285, Inv. 4564. 11. November 16 Invoiced Cayden's Coffee Club for Barista training, Inv. 4565 for $3,300. 12. November 16 13. November 20 The owner withdrew cash of $2,350 - chq 75. 14. November 22 15. November 23 16. November 23 Paid electricity and gas bill, $390 - chq 77. 17. November 24 Received payment from Cayden's Coffee Club for invoice 4564, less the applicable discount. 18. November 26 Sold to H. Proctor, 10 Espresso Deluxe machines - $9,350, inv. 4566. 19. November 26 Purchased 20 Espresso Sprints coffee machines from Crema Paid the 1st November amount owing to Crema Supplies Pty Ltd with chq 76. No discounts were applicable. Paid fortnightly wages of $1,760 - chq 78. Paid superannuation contributions owing from July of $756 - chq 79. 6 Perfecto Coffee Supplies Pty Ltd for $7084. Terms 2/10, n/30, inv. 1389. 20. November Recorded bank charges of $40 and interest earned of $22. 30 Instructions for Completion of Practice Set A. Open all general ledger accounts by inserting the opening balances at 1 November as shown in the Chart of Accounts on page 3. For example, the balance of account 110 - Cash at Bank is $18,835 debit. Write \"Opening Balance\" in the \"Details\" column, and place $18,835 in the \"Debit\" balance column. B. Open all subsidiary ledger accounts for accounts receivable and accounts payable by inserting the opening balances as at 1 November as shown in the schedule of accounts receivable and accounts payable on page 4. Insert the opening inventory balances into the inventory cards. Note: C. D. For the general ledger, accounts receivable subsidiary ledger and accounts payable subsidiary ledgers, all accounts have normal balances Record the transactions for November in the appropriate journals provided (narrations are not required). Post daily to the accounts receivable and accounts payable subsidiary ledgers. Post daily from the general journal. All other amounts will be posted at the end of the month. Note: For posting reference purposes, use the journal page names and numbers. For example, when posting from the sales journal the reference will be \"SJ9\". E. Total all columns of the special journals. Post from the special journals to the general ledger. F. Prepare schedules of Accounts Receivable and Accounts Payable. Check that the total of the Schedule of Accounts Receivable equals the Accounts Receivable Control account in the general ledger and that the Schedule of Accounts Payable equals the Accounts Payable account in the general ledger. G. Use the worksheet provided to prepare an Unadjusted Trial Balance as at 30 November. Check figures for this stage of the assignment are as follows: Total of the Cash column in the Cash Receipts Journal - $22212 Cash at Bank account balance - Dr $14466 Inventory account balance - $20050. GST Clearing account balance - Dr $1200 Unadjusted trial balance from worksheet - $115603 7 Perfecto Coffee Note: If any of your figures do not match those above, you have made an error which you will need to find and correct. 8 Perfecto Coffee H. Using the following information record the necessary adjusting journal entries at 30 November in the general journal. Post these to the general ledger. 1. Insurance Alberto paid 5 months insurance in advance on November 1. 2. Depreciation On November 1, the business purchased a delivery van. It has a useful life of 10 years and a residual value of $6,000. The vehicle is depreciated using the straight-line method. Record depreciation for one month. 3. Accrued Wages Wages owing at 30 November totalled $880. 4. Superannuation Superannuation contributions accrued for November total $871. 5. Office Supplies A stocktake of office supplies was performed on November 30. noted that $650 of supplies remain. It was 6. Bad Debts An assessment of bad and doubtful debts at November 30 showed an increase in the amount falling into this category. Alberto has decided to increase the Allowance for Doubtful Debts to 6% of the accounts receivable balance at November 30. 7. Rent Rent of $4,500 is paid every quarter, and was last paid on the 1 st of October. I. Record these adjustments in the adjustments column of the worksheet. J. Complete the worksheet. K. Record all closing entries in the general journal and post them to the general ledger. L. Prepare a Post-closing Trial Balance as at 30 November. M. Prepare the Income Statement (functional format), Statement of Changes in Equity, and Classified Balance Sheet