Question
The company began operations as a retailer on January 14, 2020. It buys and sells one type of boutique small form factor (SFF) computer case
The company began operations as a retailer on January 14, 2020. It buys and sells one type of boutique small form factor (SFF) computer case and operates from a leased warehouse in the outer suburbs of Melbourne. It has one supplier and one customer. The company is registered for GST. Relevant information
1. The company has the following opening balances at the 1 March in the current year:
Cash at Bank $26,185
Accounts receivable $5,237
Inventory $52,400
Prepaid rent $20,142
Motor vehicle $14,547
Accumulated depreciation motor vehicle $727
Accounts payable $6,546
Bank loan owing (due in 20 months). $39,278
Oce furniture $17,457
Accumulated depreciation office furniture $698
Oce supplies $873
Share capital $89,592
2. Transactions for the month of March in the current year (all dollar amounts include GST where applicable)
04 MarchSold inventory on credit (units) 37
06 MarchPurchased inventory paying cash (units) 44
09 MarchReceived payment from accounts receivable $3,491
10 MarchReceived advertising invoice (due in 30 days) $793
12 MarchSold inventory for cash (units) 135
13 MarchPaid wages to employees 2,182
16 MarchPurchased computer equipment paying cash $2,380
20 MarchPaid the outstanding accounts payable amount
27 MarchPaid wages to employees $2,182
30 MarchSold inventory on credit (units) 103
3. Additional information
Selling price per case (GST inclusive) $330
Cost per unit (GST inclusive) $220
All asset purchases and expenses (except wages and interest) include GST
4. Balance day adjustment for March 2020
Interest on bank loan is at 3% pa. Interest is paid every two months with the last payment made on February 29, 2020.
Business consumed 20% of opening prepaid rent balance.
Employees owed wages between the last wages payment and the last day of the month (including March 31).
Employees do not work weekends. Half of the office supplies were consumed by the end of the month.
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