Subject Code: ACC100
Subject Name: Principles of Accounting
Assessment 2 – (Accounting Cycle: Journal, Ledger, Trial balance, financial statements)
Scenario:
Part A:
Tech Gadgets Ltd. is a company began business on 1st July 2013 that sells electronic gadgets such as smartphones, laptops, and tablets. Tech Gadgets obtained the necessary ABN (77 333 555 888), CAN (333 555 888) and registered for the GST. Since an accounting system was not designed and established, a chart of accounts is required for this business.
The following transactions occurred during July 2023. The applicable GST rate is 10%.
2023
July
The owner invested $80,000 cash and a delivery van worth $20,000 in the business.
Purchased a retail building for $200,000 where fair value of the land and building were $120,000 and $80,000 respectively. Paid $40,000 in cash and the remaining amount from Commonwealth Bank by signing a mortgage.
Purchased furniture and fixtures for the store on credit from Monster Furniture Ltd for $38,500 including GST, terms n/60.
Purchased inventories on cash from EcoTech Supplier for $27,500, including GST.
Paid $528 including GST for a 2 year insurance policy from NRMA insurance.
Inventories sold to ABC Ltd for $23,100 including GST, receiving $10,000 and the rest on credit, terms n/30.
Repaired tablets and laptops for XYZ Company on credit for $2,000 plus GST.
Purchased inventory for 13,200 including GST for cash from NFS Trading Ltd.
Sold inventory to Billabong Ltd on account for $4,620 including GST .
Purchase office supplies from Office Works for $165 cash.
Received payment from ABC Ltd for 5th July sales in full.
Paid staff salary $ 2,850 for the fortnight.
Cash sales to a customer for $1,980 including GST
Sold Inventory to PIA Ltd on account for $25,830 including GST, terms 1/7, n/30.
Purchase inventory from NFS Trading Ltd on account for $27,500 plus GST, terms 2/10, n/30.
Provided repair services for cash to individual customers for $1,350 plus GST.
Received cheque from XYZ Company for the repair services provided on 6th July. 24 Signed a contract with Origin Energy to repair laptops for $250 plus GST each.
Sold inventory to Bright Star Services for $18,250 including GST, for a cheque.
Paid NFS Trading Ltd in full by cheque.
Purchased a printer for the office use priced $350 receiving 30% discount for cash transaction. The price excludes GST.
Paid staff salary $ 2,850 for the fortnight.
Purchased inventories from EcoTech Supplier on credit for $9,900 including GST, terms 2/5, n/30.
Received cheque from Billabong Ltd for 10th July.
Received cash $330 including GST for repair services provided.
Paid electricity bills for the month $341 including GST.
$1,000 worth inventories left in the business.
Paid interests on mortgage $1,200 to the commonwealth bank (no GST)
Depreciations on Building, Van and Furniture and fixtures are estimated $2000 (no GST).
Insurance expense recognised and measured for recording.
Required:
Design a Chart of accounts for Tech Gadgets Ltd. (5 marks)
Record General Journal entries for the transactions provided. (20 marks)
Post the journal entries to the appropriate ledger accounts (20 marks)
Prepare the trail balance. (10 marks)
Prepare the Profit or loss Statement for July 2023. (10 marks)
Prepare the Balance sheet Statement at the end of July 2023. (10 marks)
Part B:
you are required to explain the process you have followed to complete the assignment to your lecturer. (25 marks)
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