MAA261 : Financial Accounting: Case Study – Accounting Assignment

Internal Code :
Case Study: Glam Canines is a small business that sells a variety of high-end show dog products to customers for cash and credit. Glam Canines business operates as a sole trader and is owned and managed by Vienna Varner and her family. It is located at 123 Poodle Lane, Melbourne, which is a rented property, the rent of which is normally paid monthly in advance. As Glam Canines sells stock for cash and credit, Vienna offers credit terms 5/10, n/30. The credit rating for each customer is checked before the goods are supplied. Delivery charges are built into the price of the products sold. It is expected that there will be no price changes in the month of October. All purchases are made on credit. Vienna triesto pay her suppliers within the credit terms given so that no interest charges are incurred. It is expected that there will be no changes to the cost of inventory purchased in the month of October. You are provided with the following information relevant to the end of month balance day adjustments. You must record these in the general journal and post them to the relevant general ledger accounts.
1. Office Supplies on hand are $1,355 as at 31October 2017.
2. Depreciation for the Office Equipment is calculated using the units of production method. The total number of usage hours for the Office Equipment over its total useful life is 5,000 hours. In the month of October 2017, the Office Equipment was used for 210 hours.
3. Depreciation for the Motor Vehicles and Furniture and Fixtures is calculated using the straight-line method, assuming there are no residual values. Depreciation rates are: Motor Vehicle 25% per year Furniture & Fixtures 10% per year Depreciation is rounded to the nearest dollar each month.
4. Wages are paid monthly (for 4 weeks) on a Monday for the month ended on the previous Friday. Working hours are Monday to Friday and there is no work on the weekends. You need to allow for any unpaid gross wages, if any, at the end of October 2017.
5. The telephone and electricity bills are received on 31 October 2017. Telephone and Electricity are accrued at the end of the month. Telephone and Electricity payable as at 31 October 2017 are $616 and $528 respectively (GST inclusive).
6. The interest rate is 4.25% per year.
7. On receipt of the bank statement at the end of October 2017 there was an amount of $40 debited to the account as bank fees. No GST is charged on bank fees. This amount was paid on the 31October 2017. 8. After discussing with the accountants, Vienna decided to use the allowance method to record the $14,550 allowance for doubtful debts.
Questions :
1. Using the information provided record all transactions for the month of October in the appropriate:
a. General Journal and then
b. The general ledger (note it is optional to complete subsidiary ledgers, however it is recommended as they will assist you).
2. Please acquire a thorough understanding about the recording process before you enter transactions (please refer the relevant lecture and tutorial material and the text book for further information).
3. You are then required to record the end of month balance day adjustments in the general journal and post to the relevant general ledger accounts.
4. Prepare an adjusted trial balance as at 31 October 2017, i.e. after posting all balance day adjustments. If the trial balance does not balance do not proceed until it does.
5. You are required to record closing entries in the general journal and general ledgers.
6. Prepare an Income Statement for the month ended 31 October 2017, Statement of Changes in Equity for the month ended 31 October 2017, and a Statement of Financial Position as at 31October 2017.

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