Prepare the closing entries for the Sales Revenue account, assuming a balance of $200,000 and the Cost of Goods Sold account with a $145,000 balance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Claypool Hardware is the only hardware store in a remote area of northern Minnesota. Some of Claypool’s transactions during the current year are as follows. 5 Sold lumber on account to Bemidji Constructions, $13,390. The inventory subsidiary ledger shows the cost of this merchandise was $9,105Nov. 9 Purchased tools on account from Owatonna Tool Company, $3,800Dec. 5 Collected in cash the $13,390 account receivable from Bemidji Constructions Dec. 9 Paid the $3,800 owed to Owatonna Tool Company Dec. 31 Claypool’s personnel counted the inventory on hand and determined its cost to be $182,080. The accounting records, however, indicate inventory of $183,790 and a cost of goods sold of $695,222. The physical count of the inventory was observed by the company’s auditors and is considered correct. Instructions: a. Prepare journal entries to record these transactions and events in the accounting records of Claypool Hardware. (The company uses a perpetual inventory systems) b. Prepare a partial income statement showing the company’s gross profit for the year
BFA104 Accounting Context and Method Semester 2, 2020 Assignment Instructions: This assignment involves completing the accounting records for a small sole trader business for one month and completing the year-end procedures. It is worth 15% of your final grade. It is due by 5 pm on Friday, 25 September, 2020. A rubric is available in MyLO under the Assessments tab. To begin the assignment, you should open the Excel Proforma spreadsheet that is available under Content/Assessments. Save it immediately with your name as part of the filename. If you are not familiar with Excel, a recording is available under the Assessments area to help you with basic Excel skills and this assignment. This is an individual assignment. Under no circumstances should you share your workings or any part of your assignment with other students – this constitutes academic misconduct and actions will be taken. In previous years, several students were reported to the Head of School for academic misconduct in BFA104 with regard the assignment so please do your own work. You must complete ALL the assignment using the Excel spreadsheet proforma and this is the file you will submit on MyLO. Basic proformas have been created for you. Across the bottom of the Excel file you will see different worksheets for each journal, ledger, trial balance, etc. Where possible, you should attempt to use some basic formula such as the SUM function when totaling journals. Some marks will be allocated for setting out and use of formula. If you are having issues with the use of Excel you should, in the first instance, watch the Week 10 recording on Excel. You can also use the Help function in Excel, or search Google and watch YouTube videos. You may ask some questions about issues with Excel on MyLO discussion boards. You should not discuss how to do the actual accounting in the assignment on MyLO. You are required to: 1. Record accurately all transactions in the correct journals. You will need to complete the Inventory Subsidiary Ledger cards for the two items of inventory as you go so that you can calculate the Cost of Goods Sold for each lot of sales. (Topic 5 and Topic 7) 2. Complete adjusting entries but not closing entries at this stage. (Topic 3 and 9 for depreciation methods) 3. Complete a bank reconciliation as at 30th June before totaling the cash journals. (Topic 8 – There was a “how to do a bank reconciliation” handout.) 4. Post the journals to the general ledger at the end of the month (and post to the subsidiary ledger daily). The ledger accounts have been created for you but you will firstly need to enter the opening balances in each account on 1st June. NOTE: the income and expense accounts will have an opening balance at this point as they are only closed off using closing entries at the end of the financial year. You should get these from the Trial Balance and Schedules above. (Topic 5 – There was a “how to post” special journals handout.) 5. Reconcile your accounts receivable, accounts payable and inventory subsidiary records with control accounts. (Topic 5 and 7)
6. Complete the adjusted Trial Balance (do this BEFORE completing and posting closing entries). 7. Complete closing entries necessary at the end of the accounting period and post them to the Ledger. Balance the Balance Sheet accounts. (Topic 4) 8. Complete an internal Income Statement for period 1-30th June, and Balance Sheet as at 30th June. You should put aggregated amounts and a “Note” for the following items: • Sales and Sales Returns • Cost of Sales • Depreciation Expense (add the two together) • Accounts Receivable and Allowance for Doubtful Debts • Fixed assets and their respective accumulated depreciation • S O’Brien, Capital (incorporate drawings and profit in the note) (See Topic 4 and Topic 7 for examples) Submission of Assignment: Upload your completed spreadsheet file to the MYLO drop box. You may only submit your assignment to the drop box once. The date stamp on the electronic submission will determine if your assignment has been submitted on time. Late work WILL be penalized unless you have been granted an extension by the Unit Coordinator.
Students are is to i make up their own unique product names. Inventory unit measure s per item 1. p 4. rites are listed in the table below. 3. Selling The firm uses the perpetual inventory method of accounting for inventory, (that is when inventory, rye is purchased it is added to ‘Inventory ‘account and when goods are sod, the inventory account is reduced with the debited being to ‘Cost of Sales’). Information provided for inventory and their balances as at 1st July is as folds:
5.
Inventory Code Quantity Unit Cost Balance Unit Sell Price (ex GST) STO1 650 $24.00 $15,600 $12,000 $12,200 $11,700 $60.00 $75.00 550.00 $65.00 STO2 400 $30.00 $20.00 $26.00 STO3 610 STO4 450 STO5 640 $18.00 $11,520 $45.00 $55.00 STO6 710 $22.00 $15,620 STO7 780 $__12„90$9 360 $16,000 $30.00 $80.00 STO8 500 _____132.00 Total $104,000
Transactions for July 2017
Data source: Suppliers’ Invoices. Dates shown are invoice dates, amounts include GST where applicable. Received invoice from AP01 for 100 units of STO2 for $2,640.00, and 120 units ST07 expensed stationery on account from AP06 amounting to $1,430.00. Stationery is ended when purchased. $1,584.00. Received advertising invoice from AP07 for July’s advertising amounting to $1,760.00 8 p 12 Jul Received invoice from AP03 for 110 units ST01 $2,904.00 and 140 units STO5 $2,772.00. Received invoice from AP02 for 200 units STO3 $4,400.00 and 160 units STO8 $5,632.00. or the purchase from AP02 on the 18 July, the Warehouse manager reported that only 190 units of sTo3 and 150 units of STO8 had been received. Accounts department requested a credit note for 10 units STO3 and 10 units of STO8 from AP02 and adjusted 22 Jul Received invoice from AP09 (new supplier) $1,210.00 for legal fees in relation to lease of _2 the accounts for the amount involved. 23 Jul Received invoice from AP10 (new supplier) $506.00 for July’s cleaning expense. premises. 24 Jul Received shipment from AP02 for 250 units ST06 amounting to $6,050.00. 24 Jul Received invoice from Ap04 for telephone, Internet routers and communications system 25 Jul Received invoice from AP01 for 140 units STO6 amounting to $3,388.00- and 120-units update amounting to $1,430.00. STO4 amounting to $3,432.00. 26 Jul
5 Jul
Set up Inventory Module:
Make sure: • Tick “I buy”, “I sell”, “I Inventory” this item (to ensure it appears in sales and purchase module) • Link COGS, Sales, Inventory to the correct accounts (based on what account number you have allocated) • Enter Base Selling Price EXCLUDING GST • Check all GST fields are ticked correctly (Tax code when bought or sold = GST) • Enter Opening balances excluding GST , CHECK make sure total opening balance = GL ($69,180)
Enter purchases
• “On Account” or no mention of cash paid = $0 Paid today (this should automatically go to Accounts Payable as a liability) • Don’t forget to exclude GST in invoices, eq. 8 Jul = $1300 Stationery expense, $130 GST Paid (Tax Code “GST”) • Credit notes from Suppliers (19 Jul) go > enter negative units for STO3 and ST08, $0 paid today • APO4 to AP08 can be classified as services • Made an error? Edit via Transaction Journal ,13g85
The firm made the following transactions during July: 1. Sold merchandise on account for a total selling price of $425,000. 2. Purchased merchandise inventory on account from various suppliers for $231,500. 3. Paid rent for the month of July of $58.750. 4. Paid salaries to employees during July of $103,000. 5. Collected accounts receivable of $170,750. 6. Paid accounts payable of $194,750. 7. Paid miscellaneous expenses of $16,000.
Adjusting entries required at the end of July relate to the following: 8. The company paid the premium on a one-year insurance policy on I March 2012, with coverage beginning on that date. This is the only insurance policy in force on 30 June 2012. 9. The firm depreciates its equipment over a 10-year life. The equipment is not expected to have any residual value.