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ACC20015 Accounting Information Systems
Assignment
Semester 2, 2022
Submission information:
Due Date: END OF WEEK 10
This assignment counts 25% towards your final assessment.
The assignment must be compled in a group of 2 students.
This assignment requires you to use computer accounting software (XERO) for a small
usiness to record business transactions for a small business. It covers many of the
common transactions of everyday business in Australia, including Goods and Service Tax
(GST). It is not meant to be a data entry exercise. You are required to carefully understand
each transaction, how the software records the transactions in ledgers and how reports are
created. You must strictly follow the assignment guidelines and must use the XERO
education version (the access given by the convenor) when recording the data in XERO
education accounting package (do not use your own XERO trial version). Your assignment
will not be considered for marking I you use your own version or the XERO 30-day free trial,
as the convenor does not have the access to your selected XERO trial versions.
General information
Adrian Ariel recently purchased a carpet business for $100,000. Since then, the business
has grown into a successful importer and seller of fine carpets and rugs. AAA Carpets and
Rugs (ABN XXXXXXXXXXis situated at 133 Clare Street, Boydtown, Melbourne, Vic
3957.
AAA Carpets and Rugs purchase their inventory from a number of suppliers. In addition to
sales to individual customers the business also supplies some local carpet and rug
usinesses.
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Goods and Services Tax
AAA Carpets and Rugs (AAA) is regeistered for GST and charges charges on all inventory
sales and services provided to customers and pays GST on inventory purchases and most
usiness expenses. Non-cu
ent asset acquisitions also incur GST. The rate of GST is
10%.
Employees
AAA Carpets and Rugs employs two university students on a casual basis, Ashana
Anatolia anfd Andrew Arak. They are both paid an hourly rate of $25 per hour. They are
each owed $200 wages each at 1 September.
Note: Do not use the employee section of Xero; record the wages expense as a cash
payment.
Inventory
The folllowing is a list of inventory on hand and suppliers at 31 August 2021:
Quantity
On hand
Item
code
Item description unit
Cost
price
unit
Sales
price
Supplier
5 AR Akstafa rug XXXXXXXXXXOriental Carpets
6 MHR Manluk hall runner XXXXXXXXXXPersian Imports
8 NR Nineveh rug 2,200 2,990 Persian Imports
5 TC Ta
iz carpet XXXXXXXXXXTaba Tabai
Each of the above iterms of inventory are shown as excluding GST.
The inventory is purchased on credit under the terms of payment required by the suppliers.
Once an order is placed the supplier will deliver the inventory the same day.
AAA Carpets and Rugs uses the perpetual system and the first-in-first out method to record
inventory transactions.
Other services
Adrian and Andrea offer the additional services to customers. Revenue from Cleaning and
Repairs is recorded separately from the sale of inventory.
Cleaning:
AAA Rugs and Carpets charge a fee of $70 per hour (excluding GST) for the specialised
cleaning of antique and old rugs and carpets. Terms of payment are strictly cash at the time
the service is provided.
Repairs:
AAA Rugs and Carpets offers a repair service for a fee of $50 per hour (excluding GST).
Terms of payment are strictly cash at the time the service is provided.
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Supplier information
Name &
ABN number
Address
Terms
Last
invoice
date
Account
alance
Persian Imports
XXXXXXXXXX
47 Browns St.,
Mainsville, NSW
20154
net 30 days 10 Aug $5,500
Oriental
Carpets
XXXXXXXXXX
112 High St.,
Melbourne VIC 3008
net 30 days 20 Aug $24,200
Taba Tabai
XXXXXXXXXX
77 Sunset Rd.,
Darwin, NT 8012
net 30 days 22 Aug $11,990
Customer information
Name &
ABN numbe
Address
Date of last
invoice
Account
alance
Raver Rugs
XXXXXXXXXX
90 Srinagar Rd.,
Brunswick Vic 3056
22 Aug.
$3,410
Cairo Carpets
XXXXXXXXXX
Chodor Cres.,
Thomastown Vic 3074
25 Aug.
$3,707
Sorel Interiors
XXXXXXXXXX
11 Main Street
Kew Vic 3101
27 Aug.
$2,990
Terms of payment are net 30 days from the date of the invoice.
All cash sales are given a discount of 5%. (Note: this is not a trade discount)
Bank loan
AAA Rugs and Carpets bo
owed $80,000 from Eastern Bank for the business. On the last
day of each month a total of $2,125 is paid to Eastern Bank for the loan which comprises
$1,500 principal and $625 interest.
Prepaid Advertising
AAA Rugs and Carpets paid for a seven month advertisement on 1 August for $770
(including GST) in the Leader newspapers. The advertisement appears in numerous local
Leader newspapers throughout the city.
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Trial Balance as at 31 August 2021
$ $
600 Bank account XXXXXXXXXX28,493
610 Accounts Receivable 10,107
620 Prepaid expenses 600
630 Inventory 25,350
640 Cleaning materials 670
710 Delivery van 28,000
711 Accumulated depreciation-delivery van 1,380
720 Shop fittings 4,500
721 Accumulated depreciation-shop fittings 1,600
800 Accounts Payable 41,690
810 Wages payable 400
815 Electricity expense payable 310
820 Net GST Payable 2,140
830 Loan-Eastern Bank 18,500
880 Owners capital-Adrian Ariel 31,700
Total 97,720 97,720
September transactions
Sept.
1 Paid Prime Real Estate rent of $6,600 (GST inclusive) for September and October
[chq 309]
2 Credit sale to Sorel Interiors: 2 Ta
iz carpets & 2 Nineveh rugs.[invoice 902]
2 Paid for printing to Officeworks (GST inclusive). [Reference: chq. 310] $473
Paid fuel and other motor vehicle expenses to GP Motors, XXXXXXXXXXGST
inclusive).[Reference: chq. 311]
3 Credit purchase of 5 Nineveh rugs.[Reference: N35]
3 Sorel Interiors paid the balance owing on 1 September.
4 Paid Tru energy the accrued electricity expense owing.[Reference: chq.312]
4 Credit sale to Raver Rugs: 3 Akstafa rugs, 3 Manluk hall runners, 2 Nineveh
ugs.[Invoice 903]
5 Paid Mason Stewart $1,540 (GST inclusive) for a new cash register. It is estimated
that the cash register will have an effective life of 10 years with nil residual
value.[Reference:chq.313]
5 Credit purchase from Persian Imports: 5 Akstafa rugs, 6 Manluk hall runners.
[Reference: AM56]
6 AAA paid Persian Imports the balance owing at 1 September.[Reference: chq 314]
6 Credit purchase of 5 Ta
iz carpets.[Reference: T5]
7 Paid Ashana Anatolia and Andrew Arak each for 15 hours worked plus the amount
owing at 1 September.[Reference: chq. 315, Reference: chq 316]
7 AAA Carpets and Rugs purchased cleaning materials on credit from Klean King
(ABN XXXXXXXXXX), $308 (GST inclusive). Klean King requires payment terms
of net 30 days. This is recorded in a separate account to the purchase of
inventory.[Reference: KK1]
8 Cash sales: 2 Mamluk hall runners, 1 Nineveh rug, 2 Ta
iz carpets.[Invoice 904]
9 Paid monthly loan repayment to Eastern Bank. AAA Carpets and Rugs paid a
additional $1,000 off the loan principal. [Reference: chq. 317]
10 Paid Oriental Carpets the balance owing at 1 September. [Reference: chq 318]
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10 Adrian withdrew $1,000 for personal use.[Reference: chq 319]
11 Paid Persian Imports for inventory purchased on 3 September.[Reference: chq 320]
11 AAA Carpets and Rugs received payment for 9 hours cleaning and 14 hours for
epairs. [Reference: C210, Reference R122]
12 Raver Rugs paid the balance owing at 1 September.
12 Credit purchase of 7 Manluk hall runners and 6 Ninevah rugs.[Reference: MN76]
13 Received payment from Cairo Carpets for balance owing at 1 September.
14 Adrian notices that 1 Manluk hall runner is damaged and returns it to the supplier,
Persian Imports and receives a full credit for the damaged carpet.
15 Paid Ashana Anatolia and Andrew Arak each for 20 hours worked.[Reference: chqs.
321, Reference: chq 322]
15 Paid telephone expenses of $572 (GST inclusive) to Telstra.[Reference: chq 323]
15 Credit sale to Cairo Carpets: 3 Akstafa rugs, 3 Nineveh rugs, 3 Manluk hall
unners.[Invoice 905]
16 Paid Taba Tabai the balance owing at 1 September and for inventory purchased on
6 September. [Reference: Invoice chq. 324]
17 Credit sale to Raver Rugs: 2 Akstafa rugs, 3 Ta
iz carpets. [Invoice 906]
17 Cash sales – received payment for 6 hours cleaning and 6 hours for repairs.[Invoices
C210 and R123]
18 Paid motor vehicle expenses to GP Motors, $341 (GST inclusive).[Reference: chq.
325]
19 Credit purchase of 8 Akstafa rugs.[Reference:A8]
20 Credit sale to Raver Rugs: 4 Akstafa rugs, 5 Manluk hall runners, 1 Ta
iz
carpet.[Invoice 907]
20 Cairo carpets paid for inventory purchased on 15 September.
21 Paid the GST outstanding on 1 September 2018.[Reference: chq. 326]
22 Raver Rugs paid for inventory purchased on 4 September.
24 Paid Persian Imports $20,000.[Reference: chq. 327]
24 Credit sale to Cairo Carpets: 4 Akstafa rugs, 3 Nineveh rugs, 2 Ta
iz
carpets.[Invoice 908]
25 AAA Carpets and Rugs received payment for 18 hours cleaning and 12 hours for
epairs.[Invoices C211 and R124]
26 Cairo Carpets returned 2 Akstafa rugs. These were undamaged and returned to
inventory.
26 Credit purchase of 6 Ta
iz carpets. [Reference: T6]
27 Cairo Carpets paid for inventory purchased on 24 September.
28 Cash