REQUIREMENTS

1.The due date for this assignment is Monday 12 October WEEK 12 at 12 Noon. Late submission will not be accepted. Internal students are required to submit their assignment to the assignment box in the Business Building (512). On-line and external students are required to submit their assignment via the online LMS portal under Session 10.

2.This assignment is designed to give accounting students the opportunity to prepare a set of accounts manually. It is important that each group work on this assignment on their own. Collusion between groups is not permitted. The assignment will be marked on effort and not only on the correct answer. It is expected that groups will get different answers because of the assumptions made. Make sure the work the group submits is their own work and not copied or taken from other groups. Any evidence of collusion or copying will be treated very seriously and reported as academic misconduct.

3.This is a group assignment. Groups are to consist of 3 students only. It is your responsibility to find 2 other students to complete the assignment with. You do NOT have to be in the same tutorial group as your assignment partners. Under no circumstances may the assignment be completed by groups of two, four or any other variation of number of students! In order to do well in the assignment, it is important that students work well together as a group. To this end, a group charter has been uploaded to LMS under the assignment icon on the homepage. Each member of the group is required to read and sign the charter. This will commit all group members to attend meetings when scheduled and to undertake the work agreed to by the group. If any students have difficulties with their group members, they are to take the charter to the unit coordinator as evidence that these matters have been discussed and agreed. If any student fails to honour the group charter and does not contribute to the assignment as agreed, they will be given a reduced mark for the assignment or zero.

4.This handout contains the general information required to complete the assignment, as well as background information about the company and the transaction details. Blank journals, ledgers and financial reports are provided on LMS under the Assignment tab for you to use to complete the assignment. Hint: set up the ledger accounts in the same order provided in the unadjusted trial balance and scheduled of accounts receivable and payable given in the assignment.

COMPANY BACKGROUND

• Pets Paradise sells pet foods, toys and accessories bought from a number of suppliers who source the goods from local and overseas manufacturers. The goods are sold to several pet shops and veterinary clinics throughout Australia.
• Pets Paradise Pty Ltd has been in business in Perth since July 2016. The firm operates one retail store, which was opened by Paula Granger. As the business expanded, Paula formed a proprietary company to operate the business. The company's share capital consists of 210,000 ordinary shares that are owned by various members of the Granger family. The store is open seven days a week from 9am to 5pm and is staffed by two sales employees. The company sells pet food and accessories directly to the public. In addition, various firms and organisations purchase directly from the company on credit. The company also employs two office staff who work a five-day week from Monday to Friday. One office staff member is responsible for overseeing the daily running of the business, including inventory ordering; the other maintains the company's accounting records.

ACCOUNTING SYSTEM

The company has a financial year-end 30 June and prepares adjusting entries only at the end of the year. The firm uses the following journals to maintain its accounting records:

Sales Journal: to record all credit sales of inventory

Purchases Journal: to record all credit purchases of inventory

Cash Receipts Journal: to record all cash receipts

Cash Payments Journal: to record all cash payments

General Journal: to record all transactions other than the above

Pets Paradise maintains Accounts Receivable and Accounts Payable subsidiary ledgers.

The company maintains a general ledger to record the increases and decreases in each asset, liability, owner's equity, revenue and expense account. Subsidiary ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. The company maintains a periodic system to account for its inventory. ALL inventory is marked up by 25% on cost.

For control purposes, any freight charged on goods purchased is processed in a separate "freight inwards" account.

GOODS AND SERVICES TAX (GST)

The company is registered for GST at the rate of 10% and is required to pay GST on its purchases and to collect GST when making sales. The company uses a GST paid account for GST on purchases and a GST collected account for GST on sales (for manual records). All transactions provided for the month of June exclude GST. Therefore, you must remember to account for GST on the supply of goods and services to customers and in goods and services purchased from suppliers, when recording the transactions for June for the company.

YOUR ASSIGNMENT

The firm's in-house accountant has gone overseas for one month. You have been hired by Paula Granger to carry out the accounting duties in the accountant's absence. This assignment provides you with the unadjusted trial balance at the end of May and requires you to record typical transactions for a retail business for the last month of the financial year. Once these transactions have been recorded and posted, you are required to complete the accounting cycle by journalising and posting adjusting and closing entries and preparing financial statements.