FNSACC321_322_421 Assignment-part-4

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Monarch Institute *

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ACCOUNTING

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Accounting

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Apr 3, 2024

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Page 20 of 88 4.2 You will now use the policies and procedures you developed in above (in Activity 7.1). ABC School Supplies sells 1,000 books at $15 each (including GST) to Ben Smith (123 Smith St, Smithville 9015), on 30-day terms, based on order #236, invoice #89. Shipped on 16 June 2020 via Alpha Couriers. a. Use the above information to complete the following tax invoice template for ABC School Supplies: ABC School Supplies 12 Mountain Rd, Hill Top NSW 3101 ABN: 11 123 123 123 Tax Invoice No.: 89 Date: 16 June 2020 To: Ben Smith , 123 Smith St, Smithville 9015 Your Order No: 236 Date Shipped: 16 June 2020 Shipped Via: Alpha Couriers. Terms: 30 Days Quantity Description Price Total (incl GST) 1000 Books 15.00 15000.00

Page 21 of 88 ABC School Supplies sells 15 iPads at $770 each (including GST) to Carrie Carrigan (999 High St, Ringstone 9777), on 30-day terms, based on order #315, invoice #127. Shipped on 15 February 2021 via Beta Couriers. b. Use the above information to complete the following tax invoice template for ABC School Supplies: ABC School Supplies 12 Mountain Rd, Hill Top NSW 3101 ABN: 11 123 123 123 Tax Invoice No.: 127 Date: 15 February 2021 To: Carrie Carrigan ,999 High St, Ringstone 9777 Your Order No: 315 Date Shipped: 15 February 2021 Shipped Via: Beta Couriers Terms: 30-day Quantity Description Price Total (incl GST) 15 iPads 770.00 11550.00

Page 22 of 88 c. Copy the tax invoice you completed in part b of this activity and paste it into a new word document. Save this new word document with the filename: Invoice127_ABCSS Include this separate document in your assessment submission. NOTE : You must include the Invoice127_ABCSS file with submission of this Assessment workbook.

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Page 23 of 88 4.3 General Ledger Below are selected transactions from the general journal of Brian Smith Catering for the month of March. These journals are in line with its policies and procedures and have been approved by the Finance Accountant. General Journal - Brian Smith Catering Date Particulars Folio Debit Credit March 01 Catering Supplies GST Paid Accounts Payable - Andrea Credit purchase of catering stock 715 125 210.01 600 60 660 20 Catering Supplies GST Paid Accounts Payable – Dave Credit purchase of catering stock 715 125 210.03 300 30 330 27 Accounts Payable – Andrea Bank Payment of account 210.01 100 660 660 30 Telephone GST Paid Accounts Payable – Telstra Telephone account received 765 125 210.04 100 10 110 31 Accounts Payable – Office Shop Bank Payment of account 210.02 100 88 88

Page 24 of 88 a. In line with its policies and procedures, post from the general journal to the general ledger and to the individual creditor accounts in the accounts payable subsidiary ledger. The opening balances have been entered for you. General Ledger - Brian Smith Catering Date Details Folio Debit Credit Balance Bank 01/03 Balance 10,000 DR 27/03 Accounts Payable- Andrea 210.01 660 30/03 Accounts Payable – Office Shop 210.02 88 GST Paid 01/03 Accounts Payable- Andrea 210.01 60 60 DR 20/03 Accounts Payable – Dave 210.03 30 90 DR 30/03 Accounts Payable – Telstra 210.04 10 100 DR Accounts Payable Control 210 01/03 Balance N/A 88 CR 01/03 Catering Suppliers, GST Paid 715,125 660 748 CR 20/03 Catering Suppliers, GST Paid 715,125 330 1,078 CR 27/03 Bank 100 660 418 CR 30/03 Accounts Payable – Telstra 765,125 110 528 CR 30/03 Bank 210.0 88 440CR Telephone 765 30/03 Accounts Payable – Telstra 210.04 100 100 DR Catering Supplies 715 01/03 Accounts Payable - Andrea 210.1 600.00 20/03 Accounts Payable – Dave 210.03 300.00

Page 25 of 88 Payables Subsidiary Ledger - Brian Smith Catering Date Details Folio Debit Credit Balance Andrea 210.01 01/03 Catering Suppliers, GST Paid 715,125 660 660 CR 27/03 Bank 100 660 0 Office Shop 210.02 01/03 Balance N/A 88 CR 31/03 Bank 100 88 0 Dave 210.03 20/03 Catering Suppliers, GST Paid 715,125 330 330CR Telstra 210.04 30/03 Accounts Payable – Telstra 765,125 110 110CR b. Prepare a schedule of accounts payable as of 31 March: Schedule of Accounts Payable Amounts Supplier Name: $ Telstra 110 Dave 330 Total (must equal balance as per Accounts Payable Control Account) 440

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Page 26 of 88 c. Use the following template to write an email to management specifying the amounts owing to each creditor, ask that them to confirm the accuracy and authorise payment of the balance of the Accounts Payable Control Account: Send  To: Smith Worgan, Subject: Confirm the accuracy and authorise payment of the balance of the Accounts Payable Control Account: Dear Smith Worgan, I am writing to provide an update on the outstanding amounts owed to our creditors and seek your confirmation of the accuracy before proceeding with payments. Please find below a detailed breakdown of the amounts owing to each creditor: Telstra $ 110 Dave $ 330 The total outstanding balance in the Accounts Payable Control Account is $ 440 We kindly request you to review the provided information and confirm its accuracy at your earliest convenience. Once we receive your confirmation, we will proceed with the necessary payments to settle these outstanding obligations. Please feel free to reach out if you have any questions or require any additional information regarding the above amounts. Thank you for your attention to this matter. Best regards, Buddhi Yapa

Page 27 of 88 4.4 Paymore Landscapers supplies you with the following information for October:

Page 28 of 88 a. Enter the above transactions into the General Journal: General Journal – Paymore Landscapers Date Particulars Folio Debit Credit 03/10 Accounts receivable control N/A 660 Service revenue, Me Kong Restaurant N/A 600 GST collected N/A 60 Credit Sales Invoice 81 N/A 11/10 Accounts receivable control N/A 1100 Service revenue, Hilltown hotel N/A 1000 GST collected N/A 100 Credit Sales Invoice 82 N/A 16/10 Bank N/A 660 Accounts receivable control N/A 660 Receipt 71 N/A 19/10 Accounts receivable control N/A 330 Service revenue, Grace Park N/A 300 GST collected N/A 30 Credit Sales Invoice 83 N/A 24/10 Bank N/A 1100 Accounts receivable control N/A 1100 Receipt 72 N/A 28/10 Bank N/A 330 Accounts receivable control N/A 330 Receipt 73 N/A 30/10 Accounts receivable control N/A 770 Service revenue, Delice Resort N/A 700 GST collected N/A 70 Credit Sales Invoice 84 N/A 30/10 Bank N/A 770 Service revenue N/A 700 GST collected N/A 70 Cash Sales Receipt 74 N/A

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Page 29 of 88 b. Post to the General Ledger and to the individual debtor accounts in the Receivables Subsidiary Ledger. General Ledger - Paymore Landscapers Date Details Folio Debit Credit Balance Bank 16/10 Accounts receivable control N/A 660 660 DR 24/10 Accounts receivable control N/A 1100 1760 DR 28/10 Accounts receivable control N/A 330 2090 DR 30/10 Service revenue ,GST collected N/A 770 2860 DR Accounts Receivable Control 03/10 Service revenue, GST collected N/A 660 660 DR 11//10 Service revenue, GST collected N/A 1100 1760 DR 16/10 Bank N/A 660 1100 DR 19/10 Service revenue, GST collected N/A 330 1430 DR 24/10 Bank N/A 1100 330 DR 28/10 Bank N/A 330 0 30/10 Service revenue, GST collected N/A 770 770 DR GST Collected 03/10 Accounts receivable control N/A 60 60 CR 11/10 Accounts receivable control N/A 100 160 CR 19/10 Accounts receivable control N/A 30 190 CR 30/10 Accounts receivable control N/A 70 260 CR 30/10 Bank N/A 70 330 CR

Page 30 of 88 General Ledger - Paymore Landscapers Service Revenue 03/10 Accounts receivable control N/A 600 600CR 11/10 Accounts receivable control N/A 1000 1600CR 19/10 Accounts receivable control N/A 300 1900CR 30/10 Accounts receivable control N/A 700 2500CR 30/10 Bank N/A 700 3200CR

Page 31 of 88 Receivables Subsidiary Ledger - Paymore Landscapers Date Details Folio Debit Credit Balance Me Kong Restaurant 03/10 Accounts receivable control N/A 660 660 DR 16/10 Bank N/A 660 0 Hilltown Hotel 11/10 Accounts receivable control N/A 1100 1100DR 24/10 Bank N/A 1100 0 Grace Park 19/10 Accounts receivable control N/A 330 330 DR 28/10 Bank N/A 330 0 Delice Resort 30/10 Accounts receivable control N/A 770 770 DR N/A

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Page 32 of 88 c. Prepare a schedule of Accounts Receivable as of 31 October: Schedule of Accounts Receivable Amounts Supplier Name: $ Delice Resort 770 Total (must equal the balance of the Accounts Receivable Control account) 770. d. Under industry codes of practice and best practices, what must you create when setting up subsidiary ledgers? It creates detailed and organized records for specific categories or types of transactions. These subsidiary ledgers provide a more granular view of the transactions that make up the general ledger accounts Here it can establish and maintain subsidiary ledgers that contribute to accurate financial reporting, effective decision-making, and regulatory compliance. Moreover , the specific requirements may vary depending on the industry and the nature of the transactions being recorded.

Page 33 of 88 e. Outline the steps you would take if (in part c of this activity) the total of the subsidiary ledger did not reconcile with the control account balance? If the total of the subsidiary ledger does not reconcile with the control account balance, it indicates that there may be errors or discrepancies in the subsidiary ledger entries. Here are the steps you would typically take to resolve this issue: 1. Verify Accuracy of Entries: Double-check all entries in the subsidiary ledger for accuracy. Ensure that each transaction is properly recorded, classified, and posted. 2. Reconcile Individual Transactions: Review each individual transaction in the subsidiary ledger and compare it with the corresponding entry in the control account. Identify any discrepancies. 3. Check for Omissions or Duplications: Look for any missing or duplicated transactions in the subsidiary ledger. Ensure that all relevant transactions have been included and that none have been recorded more than once. 4. Review Posting Process: Check the process used for posting transactions from the subsidiary ledger to the control account. Verify that it is being done correctly and consistently. 5. Inspect Opening Balances: Confirm that the opening balances in the subsidiary ledger match the closing balances from the previous accounting period. Any discrepancies here can lead to issues in reconciliation. 6. Trace Back to Source Documents: If possible, go back to the original source documents (e.g., invoices, receipts) to verify the accuracy of the recorded transactions. 7. Verify Data Entry: Ensure that data entry was done accurately. Typos or transposition errors can lead to discrepancies. 8. Check for Timing Differences: Confirm that transactions in the subsidiary ledger and the control account are for the same time period. Timing differences can lead to reconciliation issues. 9. Consider Reversal or Correction Entries: If you identify specific errors, consider making reversal or correction entries to rectify them. Document these entries clearly. 10. Reconcile Again:

Page 34 of 88 The following invoice was issued to Blue Gum Organics and payment was received on 22/10/2020. The funds were banked and the following journal entry was recorded in Paymore L andscaper’s Cash Receipts Journal: Dr Bank $55 Cr Debtors $55 A receipt was emailed to Blue Gum Organics on 23/10/2020 acknowledging their payment of $550:

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Page 35 of 88 4.5 Check the invoice for Blue Gum Organics, above. In accordance with the firm’s policies and procedures, an adjustment to rectify the error must be made. Record the adjustment needed in the Cash Receipts Journal to correct the error. Cash Receipts Journal Date Receipt No. Details A/C No. Sales Debtors GST Collected Amount Banked 23/10/2020 xxxx Adjustment for invoice 100,incorrect amount recorded N/A 495 495

Page 36 of 88 Your firm received the following invoice from Maxi Mowers and payment was made on 4/2/2021. The following journal entry was recorded in the Cash Payments Journal: Dr Creditors $250 Cr Bank $250 A receipt was emailed from Maxi Mowers on 5/2/2021 acknowledging their receipt of $270.

Page 37 of 88 4.6 Check the invoice for Maxi Mowers, above. In accordance with the firm’s polici es and procedures, an adjustment to rectify the error must be made. Record the adjustment needed in the Cash Payments Journal to correct the error. Cash Payments Journal Date Receipt No. Details A/C No. Admin Exp Creditors GST Paid Bank 05/02/2021 XXXXX Adjustment for invoice 72, incorrect amount recorded N/A 20 20

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