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Assignment General information Al Wilson owns and runs a retail and wholesale surf shop, Surf Haven, in a sea side town The business is situated on a prominent corner of the town at 1 View Street,...

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Assignment

General information

Al Wilson owns and runs a retail and wholesale surf shop, Surf Haven, in a sea side town The business is situated on a prominent corner of the town at 1 View Street, Bell’s Inlet. Its custom is mainly from young surf board, sailing and boogie board riders.

The shop has a nautical atmosphere and is very well organised. Products consist of surfboards, sailboards and boogie boards. Surf Haven also sells second-hand surfboards on commission.
Surf Haven also supplies many of the surf shops around the coast.
The business charges GST on all inventory sales and surfing lessons, and pays GST on inventory purchases and most business expenses.

Employees
Surf Haven employs two casual assistants, Brian Jardine, works as a surfing instructor with Al and Carl Holland who works in the shop selling stock, and taking bookings for surf lessons. Fred pays both Brian and Carl $30 per hour. Each employee works between 10 to 15 hours per week, depending on the season and demand. Payday is every second Wednesday.

At the end of Fe
uary, Surf Haven owed 4 hours pay to both Brian and Carl.

Note: Do not use the payroll section of MYOB; record wages expense cash payment.

Goods and Services Tax
Surf Haven pays GST of 10% on all business expenses, except wages. Non-cu
ent asset acquisitions are also taxed at 10%.


Merchandise Inventory
The following is a list of closing inventory and the suppliers as at 28 Fe
uary 2018.
    Quantity on hand
    Item
Code
    Description
    Cost Price
         Sale
Price
    Supplier
    20
    SFB
    Surfboards
    $420
    $750
    Custom Surfboards
    15
    BBD
    Boogie Boards
    $120
    $240
    Wave Rider
    30
    SFM
    Surfing Manuals
    $10
    $25
    Seahorse Publishers

Each of the above items of inventory is quoted excluding GST.

The required inventory is purchased on credit under the terms of payment required by the suppliers.
Al has a good relationship with each of his suppliers. Once he places an order, the suppliers will deliver them free of charge the same day.


Lessons
All lessons are paid for at the time of the lesson and is recorded separately to the sale of inventory.


Supplier information
Suppliers account balances at 28 Fe
uary 2018.
    Name
    Address
    Account Balance
    Custom Surfboards ABN XXXXXXXXXX
    56 Main Street, Torquay
    $3,700
     Wave Rider
ABN XXXXXXXXXX
    2 Beach Road, Fairhaven
    $5,500
    Seahorse Publishers XXXXXXXXXX
    1B Carlton Parade, Geelong
    $2,300

Each of the above account balances represents deliveries of inventory received on 22 Fe
uary 2018; all purchases are on terms 2/10, n30. All inventory items are delivered on the same day as they are ordered.

    
Customer information
Surf Haven sells most of its inventory strictly on a cash basis, but the business has three credit customers. Terms of payment for these customers are net 30 days.
Customer balances at 28 Fe
uary 2018:
    Name
    Address
    Date Last Invoice
    Account Balance
    Sharkeys Wye River ABN XXXXXXXXXX
    14 Bay Street
Wye River
    Feb 18
    $2,400
    Torquay Surf Shop ABN XXXXXXXXXX
    47 Buckley Road,
Torquay
    Feb 20
    $4,000
    Aireys Surf Club ABN XXXXXXXXXX
    3 Aireys Lane
Aireys Inlet
    Feb 22
    $1,700
Terms of payment for customers is 2/10, n30. Freight of $50 (GST exclusive) is charged for all credit sales.


Trial Balance as at 28 Fe
uary 2018
    
    Account
    Debit ($)
    Credit ($)
     1-1110
     Bank
    10,500
    
     1-1200
     Accounts Receivable
    8,100
    
     1-1300
     Inventory
    10,500
    
     1-1400
     Stationery supplies
    650
    
     1-3110
     Shop Fittings & equipment (cost)
    12,500
    
     1-3120
     Accumulated depreciation Shop fittings & equipment
    
    1,450
     1-3210
     Motor vehicle (cost)
    22,000
    
     1-3220
     Accumulated Depreciation - Motor Vehicle.
    
    3,500
     2-1200
     Accounts Payable
    
    11,500
     2-1310
     Net GST Payable
    
    560
     2-1350
     Wages payable
    
    240
     2-2100
     Loan – ANZ Bank, Bell’s Inlet
    
    20,000
     3-1200
     Capital – Al Jardine
    
    27,000
    
     Total
    64,250
    64,250



    
Transactions: March 2018

    1     Paid cash for printing expenses to Acorn Press– $594 (GST Inclusive).[chq 201]
1 Purchased a new cash register for $2,310 (GST inclusive) [chq 202].It is expected that the cash register will have an effective life of 6 years with a nil residual value.
2 Paid three month’s rent of $4,620 (GST inclusive) to Prime Real Estate. [chq 203].
3 Paid for two months (March & April) advertising in the Surfing Times – $286 (GST inclusive) [chq 204]
4 Credit sale to Airey’s Surf Club : inventory sold: 2 boogie boards, 2 surfboards, 3 surfing manuals (Invoice CR663)
5 Received payment of $4,000 from Torquay Surf Shop
    8     Received $1,540 (GST inclusive) for surfing lessons.
8 Paid Seahorse Publishers for Fe
uary account. [chq 205]
9 Paid cash to GMJ Autos for vehicle expenses- $297 – (Including GST) [chq 206]
    9     Purchased inventory: 12 surfboards and 16 boogie boards. (P.O. 326, 327)
9 Received payment from Starkey’s Wye River for balance outstanding at 27 Fe
uary.
10 Paid Wave Rider the balance outstanding at 28 Fe
uary. [chq 207]
10 Purchased office supplies from Ace Office Supplies, $803 [chq 208]
11 Sales Invoice sent to Sharkeys Wye River for the following items:6 surfboards, 6 boogie boards, 10 surfing manuals (invoice CR664)
12 Received $3,410 (GST inclusive) from Point Hicks School for surfing lessons.
12 Pay day. Carl was paid for 28 hours and Brian was paid for 30 hours; the payments included wages owing from Fe
uary. [Chqs 209 & 210]
12 Purchased inventory: 15 surfboards and 12 surfing manuals (P.O. 328)
14 Received payment from Airey’s Surf Club for Fe
uary account.
15 Credit sale to Torquay Surf Club: 14 surfboards, 10 boogie boards and 15 surfing manuals (Invoice CR665)
16 Cash drawings – Cheque payable to Al Wilson of $2,000 [chq 211]
16 Paid cash for vehicle expenses – $220 (Including GST) [chq 212]
16 Purchased 12 boogie boards (P.O. 329)
17 Received payment from Airey’s Surf Club for 4 March sales.
17 Returned 2 boogie boards to Wave Rider. They were slightly damaged. A Credit Note was issued by the supplier. These items were from the purchase on 16 March
18 Received payment from Sharkey’s Wye River for inventory sold on 11 March.
18 Cash sales of 3 surfboards and 3 surfing manuals (Invoice CS754)
19 Purchased 10 surfing manuals (P.O. 330)
19 Paid Australian Taxation Office GST owing [Chq 213]
20 Paid Wave Rider for inventory purchased on 16 March [Chq 214]
21 Paid Custom Surfboards the balance outstanding on 28 Fe
uary 2018[chq 215]
22 Credit sale to Aireys Surf Club: 5 surfboards and 5 boogie boards (Invoice CR666)
23 Purchased 12 surfboards and 15 surfing manuals (P.O. 331 & 332)
23 Al introduces a new product for sale. He purchased 20 sailboards from Wave Rider for $400 each (GST exclusive) (P.O XXXXXXXXXXSelling price of the sailboards is $640 each (GST exclusive).
24 Paid Custom Surfboards for inventory purchased on 12 March. [Chq 216]
24 Paid monthly repayment to ANZ for bank loan; $1,050 (includes $50 interest). GST is not payable on this transaction. Fred decided that the business would pay an additional $500 off the loan principal. [chq 217]
25 Paid Telstra Ltd for business phone accounts - $572 (GST Inclusive) [chq 218]
25 Credit sale to Sharkeys Wye River: 8 surfboards, 9 boogie boards and 7 sailboards. (Invoice CR667)
26 Pay day. Carl was paid for 30 hours and Brian was paid for 24 hours. [chqs 219 & 220]
26 Sharkeys Wye River returned 1 sailboard and received a credit note. The sailboard was undamaged and returned to inventory.
27 Received $2,695 cash (GST inclusive) for surfing lessons.
    27     
27 A customer purchased 3 surfboards for cash at a special price of $1,485 each (including GST). The customer also purchased 6 surfing manuals at the normal price. (Invoice CS755)
28 Received partial payment of $7,000 from Torquay Surf Club.
31 The ANZ Bank in Williamsville has sent a bank statement for the month of March 2018. The following items were noted from the bank statement:
· Bank fees of $35 were debited to the account on 30 March
· A credit for an electronic transfer of $1,200 was received for sale of second-hand surfboards on commission.


Adjustments at 31 March 2018

Some of the necessary adjustments are to be found in the transactions above. Other adjustments are listed below.
1. The physical stock take does not agree with the computer records and adjustments for inventory are required.
         Physical stock-take as at 31 March 2018:
· Surfboards 18 • Sailboards 14
· Boogie boards      8
· Surfing manuals 28
    

2. A stock take of stationery supplies revealed $540 of stationery on hand at 31 March 2018.
3. The shop fittings are to be depreciated using the straight line method, at 15% per annum on cost. The motor vehicle is to be depreciated using the straight line method at 20% per annum on cost.
4. Accrued wages owing on 31 March 2018: Carl – 8 hours, and Brian – 10 hours.


Accounts List

Assets
    1-1000     Cu
ent Assets
    1-1110     Cash at Bank
    1-1180     Undeposited funds
    1-1190     Electronic clearing account
    1-1200     Trade Accounts Receivable
    1-1250     Other income receivable
    1-1300     Inventory
Answered Same Day May 09, 2020

Solution

Pulkit answered on May 11 2020
133 Votes
GnlJnl
    GENERAL JOURNAL
    Date            Post
            Description    Ref.    Debit    Credit
    March    17    Accounts Payable    2-1200    264.00
            Inventory    1-1300        240.00
            GST Paid    2-1330        24.00
            Returned 2 damaged Boogie boards
        26    Sales Returns and Allowances    4-1200    640.00
            GST Collected    2-1310    64.00
            Accounts Receivable    1-1200        704.00
            1 sailboard returned by Sharkeys Wye Rive
            Inventory    1-1300    400.00
            Cost of Sales    5-1100        400.00            1 boogie
            1 sailboard returned put back into inventory                        2 surf manua
        31    Cash register-depreciation    6-1500    350.00
            Cash register-accumulated depreciation    1-3320        350.00
            Annual depreciation of cash registe
        31    Invetory lost expenses    5-1200    140.00
            Invetory    1-1300        140.00
            Lost 1 boogie board and 2 surfing manual
        31    Stationary Supplies Expense (650+730-540)    6-1800    840.00
            Stationary Supplies    1-1400        840.00
            Stationary Suppiles used during the month
        31    Shop fittings equipment-depreciation    6-1300    1875.00
            Shop fittings equipment-accumulated depreciation    1-3120.        1875.00
        31    Motor vehicle-depreciation    6-1400    4400.00
            Motor vehicle-accumulated depreciation    1-3220.        4400.00
        31    Wages and Salaries Expense    6-1930.    540.00
            Wages Payable    2-1700        540.00
            Accrued Wages
PurJnl
    PURCHASES JOURNAL Page: 11
    Date        P.O.            Post.        Freight    GST Paid    Accounts
            No.    Account    Terms    Ref.    Inventory    Paid    (Outlays)    Payable            cost    sale
    March                                            Surfboards    420    750        20
        9    326    Custom Surfboards    2/10, n/30        5,040.00        504.00    5,544.00        Boogie Boards    120    240        15
        9    327    Wave Rider    2/10, n/30        1,920.00        192.00    2,112.00        Surfing Manuals    10    25        30
        12    328    Custom Surfboards    2/10, n/30        6,300.00        630.00    6,930.00        Sailboards    400    640
        12    328    Seahorse Publishers    2/10, n/30        120.00        12.00    132.00
        16    329    Wave Rider    2/10, n/30        1,440.00        144.00    1,584.00
        19    330    Seahorse Publishers    2/10, n/30        100.00        10.00    110.00
        23    331    Custom Surfboards    2/10, n/30        5,040        504.00    5,544.00
        23    332    Seahorse Publishers    2/10, n/30        150.00        15.00    165.00
        23    333    Wave Rider    2/10, n/30        8000        800.00    8,800.00
                Total            28110.00        2811.00    30921.00
SalesJnl
    SALES JOURNAL
            Inv.            Post    Cost of        Freight    GST    Accounts            cost    sale
    Date        No.    Account    Terms    Ref.    Goods Sold    Sales    Collected    Collected    Receivable        Surfboards    420    750
    March                                                Boogie Boards    120    240
        4    CR663    Airey’s Surf Club    2/10, n/30        1,110.00    2,055.00    50.00    210.50    2,315.50        Surfing Manuals    10    25
        11    CR664    Sharkeys Wye River    2/10, n/30        3,340.00    6,190.00    50.00    624.00    6,864.00        Sailboards    400    640
        15    CR665    Torquay Surf Club    2/10, n/30        7,230.00    13,275.00    50.00    1,332.50    14,657.50
        22    CR666    Airey’s Surf Club    2/10, n/30        2,700.00    4,950.00    50.00    500.00    5,500.00
        25    CR667    Sharkeys Wye River    2/10, n/30        7,240.00    12,640.00    50.00    1,269.00    13,959.00
                Total            21620.00    39110.00    250.00    3936.00    43296.00
CRJ
    CASH RECEIPTS JOURNAL
    Date                        Debits        Credits
                Post    Disc    GST    Cash at    Cost of    Cash    Lessons    Accounts    GST
            Account    Ref.    Exp    Coll    Bank    Goods Sold    Sales        Receivable    Collected    Othe
    March                                                        cost    sale
        5    Torquay Surf Shop                4000.00                4000.00            Surfboards    420    750
        8    Surfing lessons                1540.00            1400.00        140.00        Boogie Boards    120    240
        9    Starkey’s Wye River                2400.00                2400.00            Surfing Manuals    10    25
        12    suffing lessons-Point Hick                3410.00            3100.00        310.00
        14    Airey’s Surf Club                1700.00                1700.00
        17    Airey’s Surf Club                2315.50                2315.50
        18    Sharkeys Wye River        124.8    12.48    6726.72                6864.00
        18    Cash sales                2557.50    1290.00    2325.00            232.50
        27    Surfing lessons                2695.00            2450.00        245.00
        27    Cash sales                5065.50    1320.00    4605.00            460.50
        28    Torquay Surf Shop                7000.00                7000.00
        31    Commission                1200.00                        1200.00
            Total        124.8    12.48    40610.22    2610    6930    6950    24279.5    1388    1200
CPJ
    CASH PAYMENTS JOURNAL
                        Debits                        Credits
                Cheque    Post    Accounts    GST Paid                    Cash at    Discount    GST Paid
    Date        Account    No.    Ref.    Payable    Rec'able    Wages    Vehicle    Drawings    Other    Bank    Received    Rec'able
    March
        1    Printing expenses    201            54.00                540.00    594.00
        1    purchase new cash register                210.00                2,100.00    2,310.00
        2    rent (Prime real estate)    203            420.00                4,200.00    4,620.00
        3    advertising expenses    204            26.00                260.00    286.00
        8    Seahorse Publishers    205        2,300.00                        2,300.00
        9    vehicle expense-GMJ autos    206            27.00        270.00            297.00
        10    Wave Rider    207        5,500.00                        5,500.00
        10    Purchase stationary supplies    208            73.00                730.00    803.00
        12    wages - Carl    209                840.00                840.00
        12    wages - Brian    210                900.00                900.00
        16    cash drawings    211                        2,000.00        2,000.00
        16    vehicle expenses    212            20.00        200.00            220.00
        19    GST Paid to ATO    213    2-1310        560.00                    560.00
        20    Wave Rider    214        1,320.00                        1,293.60    24.00    2.40
        21    Custom Surfboards    215        3,700.00                        3,700.00
        24    Custom Surfboards    216        6,930.00                        6,930.00
        24    Paid monthly repayment    217                            1,500.00    1,500.00
        24    Interest expenses    217                            50.00    50.00
        25    Telstra Ltd    218            52.00                520.00    572.00
        26    wages-Carl    219                900.00                900.00
        26    wages-Brian    220                720.00                720.00
        31    bank fees expense                                35.00    35.00
            Total            19,750    1,442    3,360    470    2,000    9,935    36,931    24    2.40
GenLdger-Rbal
    GENERAL LEDGER
    Name: CASH AT BANK Acct No.: 1-1110
                        Post.
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                10500.00        10500.00
        31    Trade Accts Rec. Control            CRJ    40610.22        51110.22
        31    Trade Accts Pay. Control
Wages            CPJ        36930.60    14179.62
    Name: TRADE ACCOUNTS RECEIVABLE Acct No.: 1-1200
                        Post.
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                8100.00        8100.00
        26    Sales Returns & Allow.            GJ        704.00    7396.00
        31    Sales            SJ    43296.00        50692.00
        31    Payments Received            CRJ        24279.50    26412.50
    Name: INVENTORY Acct.:1-1300
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                10500.00        10500.00
        17    Returns to supplier            GJ        240.00    10260.00
        26    Returns from customer            GJ    400.00        10660.00
        31    Purchase inventory            PJ    28110.00        38770.00
        31    Cost of Sales            SJ        21620.00    17150.00
        31    Cost of Sales            CRJ        2610.00    14540.00
        31    Inventory Shortage Expense            GJ        140.00    14400.00
    Name: STATIONERY SUPPLIES Acct.:1-1400
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                650.00        650.00
                                    `
        10    Purchase stationary supplies            CPJ    730.00        1380.00
        31    Stationary supplies expenses            GJ        840.00    540.00
    Name: SHOP FITTINGS-COST Acct No.: 1-3110
                        Post.
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                12500.00        12500.00
    Name: SHOP FTIINGS-ACCUMULATED DEPRECIATION Acct No.: 1-3120
    March
        1    Opening Balance                    1450.00    1450.00
        31    Depreciation expenses            GJ        1875.00    3325.00
    Name: MOTOR VEHICLE -COST Acct No.: 1-3210
                        Post.
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening Balance                22000.00        22000.00
    Name: MOTOR VEHICLE-ACCUMULATED DEPRECIATION Acct No.: 1-3220
                        Post.
    Date        Explanation            Ref.    Debit    Credit    Balance
    March
        1    Opening...
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