Accounting - James Street Redfern - Jane Moses - Review Writing Assignment Help

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Jane Moses Review Writing Assignment Help

Assignment: Assume your client is Jane Moses of 15 Lily Street Rosehill, who wants you to act for her on the purchase of a unit at 2/1 James Street Redfern, from Colin Thompson for $415,000. Before carrying out any work for this new client you should comply with your obligations in Division 5 CLA to disclose costs. You quote $1050 for costs and assume your disbursements are as listed in the Sample Costs Disclosure in Appendix T1(see attached sample for example). Read s 36 now. On 1 March, Moses hands you a Westpac bank cheque for $65,000 for the 10% deposit on her purchase, with the balance to be used for stamp duty and disbursements. These are obviously trust monies you will be holding on behalf of this client. You are required to provide the client with a receipt that must be in a particular form containing certain information, (cl 22). Exercise 1 Review Part 4 CLA 2003. Using the details given for your client Moses, make a list of matters you think should be included in a costs agreement that you would be prepared to use in your own conveyancing business. When preparing this list, think about what is required by the Act and about the benefits of having a formal costs agreement over a simple disclosure like the example given in Appendix T1.(attached) Consider also whether there are any other matters that should be included for the benefit of your business and for your own protection. Exercise 2: Workbook: Turn now to your workbook and complete the example bank deposit slip for the Bank cheque from Westpac Sydney for $65,000 you received from your client Moses. Make sure that you fill in all the details required for the deposit slip. Refer to cl 24 again if you are unsure about these requirements. Make up any details you need to comply. Once you have carried out these procedures in compliance with the Act and Regulations your client will have the receipt as proof that the money has been paid to you. Similarly, the stamped bank deposit book will provide the evidence of your deposit of those trust funds into the bank for safekeeping. Exercise 3: Workbook Turn to your workbook and complete the sample cheque and cheque butt for your client Moses when on 5 March you drew a cheque payable to Chatswood Real Estate for the 10% deposit on her purchase. Her ledger and reference is JM 0801. Make sure you have completed all the details required by the Regulation. Before writing this cheque you would have confirmed that the cheque you received from her and subsequently banked into trust had been cleared. If it had not cleared you would effectively be using funds in trust that belonged to other clients in breach of s 53 which requires you to hold money exclusively for the person on whose behalf you received those funds. Exercise 4: Workbook  All monies received for which you have given a receipt and retained a record in the duplicate trust receipt book are recorded in the cash receipts book. All payments made by cheque and recorded on the cheque butt are recorded in the cash payments book.(see attached  Appendices T3 and T4 ). Assume your second new client Mary Smart of 2 Johnson Street Liverpool (Client reference no: 0107) gives you $500 cash on account of costs and disbursements for the sale of her house. You receive the funds on 2 March 20XX. Turn to your workbook and complete the appropriate receipt, cash book entry and ledger on the exercise sheets provided. Exercise 5: Workbook Look at the sample trust journal entry below for a client James Smith. This journal entry complies with cl 26 and provides the means by which the transaction can then be recorded in the client’s ledger as the book of first entry.  Trust Journal Entry. 

Date	Journal	Particulars	Ledger	Dr.	Cr.
20XX	Ref		a/c
2 May	1	J Smith proceeds sale of Manly	2	50,000.00
		house
		To J Smith for deposit on purchase	3		50,000.00
		of property at Palm Beach as per
		instructions 1/5/XX

  Now that the funds have been transferred from Smith’s sale to his purchase by trust journal transfer, complete the ledger entries which reflect this transaction on the sample ledger accounts in your workbook. You can see from the first part of the exercise that the $50,000 is shown as a credit in Smith’s ledger for his sale. You have to show this money going out of the sale ledger and into the new purchase ledger you have set up to record this journal entry. J Smith lives at 20 Gordon Street Manly and he is purchasing a property at 2 Pacific Parade Palm Beach. As you complete the entries, keep referring back to the relevant clauses in the Regulation to make sure you have shown all the details required Exercise 6: Workbook Using the Workbook, start these transactions using the sheets provided for Exercise 6. Your first client is John Churchill of 231 Chapel Street Chatswood, who wants you to act for him on his purchase of a unit for $500,000 at 12/520 Princes Highway Yagoona, from Judy Thomas. Churchill hands you a bank cheque for $70,000 for the deposit, and on account of costs, disbursements and stamp duty. The date is 21 March (current year). The bank cheque is drawn on Westpac Chatswood. You may assume you have properly disclosed your costs and the client has instructed you to pay the disbursements disclosed from trust. Churchill is client number 1 for all entries Further instructions continue on the next page of your materials. These entries form the basis for your later accounting assignment which will be assessed. You will see in exercise 6 that the receipt for Churchill has been partly completed. Finish this off using either ‘The Conveyancing Company’ or use your ‘Own name Conveyancing’ and any other information required by the Regulation. Continue using the address and the other formal details for your conveyancing practice shown in Appendix T2. Number the cash book pages. You are required to complete all receipts, bank deposit slips and cheque butts. Unless specifically requested to do so you are NOT to complete cost agreements for these transactions. Use the dates given for the entries and the year will be the one in which you are studying the unit.  Exercise 6: Workbook 1.

1. Complete the missing receipt details for Churchill in your workbook. Prepare a cashbook receipt entry for your first client John Churchill. Create a new ledger #1 for this client. Your client gave you $70,000 on account of the deposit for his purchase, stamp duty and costs and disbursements on 21 March. The bank cheque was drawn on Westpac Chatswood.
2. On 23 March at 4pm, you are asked to urgently advise a new client Joan Drew of 12 Maxwell Street Ryde, on a contract so that she can attend an auction the next day and bid. She hands you $400 cash on account of costs and future work as she hurriedly leaves your office. You have not had time to disclose your costs in writing.
3. The next day you are to exchange contracts for John Churchill and need a cheque for the 10% deposit of $50,000 payable to Chatswood Real Estate. Before writing the cheque you would make sure that his funds had cleared as only a short time has passed since they were deposited. Try to make the entries in your workbook first without reference to Appendix T4 which gives a similar example. Check later that your entry has been recorded correctly.
4. After exchange of contracts in the Churchill matter, on 24 March you wrote a cheque to the Office of State Revenue for $17,994 for payment of stamp duty, including duplicate and transfer.
5. On 24 March Deirdre Stolley of 8 First Street Lane Cove, gives instructions for you to act for her on a lease of The Chocolate Shop from Mars Pty. Ltd. She hands you the lease which you note has a put and call option clause. You suggest you obtain Counsel’s advice on this aspect. She instructs you to seek that advice and hands you her personal cheque from NAB Lane Cove for $950 on account of costs and disbursements and counsel’s fees which have been quoted at $500. At the same time she instructs you to act for her on the purchase of a town house at 23/123 Epping Road Lane Cove from Peter Green for $320,000. She gives you another cheque for $43,500 for the 10% deposit and on account of stamp duty costs and disbursements.
6. On 25 March, Mervyn Michaels gives you $800 cash for costs and disbursements to act on his sale at 6 Brent Street Burwood. You have instructions to pay his disbursements from trust.
7. You sent out inquiries for Churchill’s purchase on 28 March to Lawstationers enclosing a trust cheque for $296.
8. On 31 March you are asked to prepare a draft lease for Terry Payne for his stationery shop at number 13 next door to your office and he pays you $800 with his personal Westpac cheque on account of costs and disbursements. No lessee has yet been found.
9. On the same day you draw a cheque in the Michaels matter to the Survey Company for a survey costing $350 and send it off with written details of the property and a copy of the deposited plan. 

Look over these entries carefully when you have completed this exercise. Make sure you have followed all the necessary steps and recorded all the transactions. These entries will be used as the basis for you to continue with the rest of the work book entries and complete the end of month transactions. Before carrying out these end of month tasks we will look at the office accounting system ACCOUNTING ASSIGNMENT Using the entries you have already made in your workbook as the basis for this exercise, carry out the following entries and complete the other nominated tasks. For this exercise you do NOT have to complete the receipts, bank deposits or cheques BUT you may do so if you wish as this will help you follow the process of the entries and you will be less likely to miss specific entries and be unable to balance. You must complete all other cash book entries and ledgers to comply with the Regulations. Do not keep money from fees paid in a trust account in your own name, just do the transfers to office in the usual manner.   If you are asked to prepare an account do NOT add any additional charges (eg; photocopying or sundries) other than as instructed. You need not be concerned with bank fees or worry about GST issues - just use the basic amounts given. The tasks that are not entered directly into your accounting workbook sheets, such as trial balances may be completed either using the pages provided in your workbook or typed and handed in on separate sheets attached to your workbook.  Please write all entries neatly. Please use pen and do NOT use white-out. Do not take the workbook apart or move pages. Please keep the trust account and office account work separate. Entries

• On 10 April you receive an account from barrister Alan Green QC for $500 for the advice he gave Deirdre Stolley about the Chocolate Shop put and call option in the lease. You pay this account from office immediately to maintain good relations with Alan. Later that day you prepare an account for Deirdre Stolley by reference to the costs agreement she signed on 24 March for perusing the Chocolate Shop lease and you charge $200 for your fees.  Prepare the account and assume you send it to her. Complete all other necessary entries arising from the preparation of this account.
• On 11 April you prepare a trial balance for the office account for the March entries and carry out a bank reconciliation. The bank statement is provided for you below. Ensure you complete all end of month procedures prior to completing the trial balance. The only cheques not presented are those for the office rent payment and the LPI search for Payne you made on 31/3. Prepare all the necessary documents and complete all entries.
•  On 12 April you act as a prescribed witness to an enduring power of attorney for a new client Steve Lomas. You hand him an account for $200 as he leaves and he writes you a cheque on the spot. He adds another $600 to the cheque, (making it $800) as he wants to buy a franchise muffler business called Mufflers RUS and wants you to act for him.  You advise him you can do that sort of work. Carry out all relevant entries for these funds as you would during the normal course of your conveyancing business and set up a new account for him.
•  On 15 April Deirdre Stolley phones and instructs you to pay your account dated 10 April, from the money held in trust on her behalf.  She has decided not to proceed with the lease for the Chocolate shop. She thinks she will purchase a Bakers Delight Franchise and is currently in negotiations. She authorises you to transfer any balance remaining in the Chocolate Shop matter to her proposed business purchase to hold as disbursements. Carry out her instructions making proper entries for payment of your account, and transfer the balance to her new matter.

That same afternoon, Joan Drew telephones and authorises you to pay the account you sent her on 30 March from trust. Complete all entries.

• On 16 April a new client James Walter on of 27 St Marys Road Pendle Hill, asks you to act for him on the purchase of a house at 18 Creek Road Windsor for $250,000 from Davis Mitchell. Title reference FI 23/45678. James hands you a cheque for $10,000 drawn in the name of your firm which is enough for stamp duty and some money on account of costs and disbursements and leaves the contract with you. Complete all entries.  You arrange for an urgent clearance of the cheque.

You quote him $1100 for costs which is inclusive of disbursements like photocopying & telephone. There will be additional disbursements for $350 for property searches; a final search of $25;  Exchange will be $45 and settlement $50. There is a cost of $18.50 for each attendance at OSR & LPI.  If needed for the matter, a survey will be $450 and $150 for a pest report. Prepare a simple costs disclosure using the above figures and assume you have given it to him. He has returned it signed and he authorises you to pay for all stated disbursements from trust.

• On 18 April contracts are exchanged in the Michaels matter in a sale to Alan Smith for $300,000. In accordance with the contract you are the stakeholder and have instructions to invest the money in an interest bearing deposit. Carry out all entries.
• After reviewing the contract for James Walter and faxing a letter of advice you take his formal instructions to proceed with the matter and order a pest inspection and survey. On 20 April you order by telephone a pest report from Pest Inspectors and agree to pay for them by sending a cheques that day. You quickly write an office cheque for $150 to Pest Inspectors and $450 for the surveyors and send them off at lunchtime.   Later that day you check your accounting records and realise the cheque James Walter had given you has now cleared. You are now able to transfer the amount you paid for the pest and survey reports from trust to your office account by way of re-imbursement which you do immediately. Complete all these entries. The next day you review the survey and pest reports which have come through very quickly. After reporting verbally to the client he calls in to sign the contract and give you the 10% deposit. You arrange with Legal searchers to exchange the Walter purchase, so you send in the contract and deposit cheque and at the same time order property searches. You send your request with a trust cheque for $395 for all anticipated searches and to pay for the exchange.
• On 21 April you take $140 cash from the petty cash tin on your way out to lunch. You buy a box of 100, 60c stamps from the Post Office and $80 worth of Reflex paper and envelopes.  You place the receipts in the petty cash and carry out all the necessary entries immediately. On the same afternoon Surveyors Co advise that the $450 office cheque you sent in payment of the James Walter purchase was accidentally thrown into the shredder and destroyed with the envelope. You agree to provide a replacement cheque immediately. Deal with the lost cheque and complete all other relevant entries.
•        On 22 April, you want to pay stamp duty on the Walter contract.  Log onto Revenue NSW and determine the amount of stamp duty payable – don’t forget to include the extra figure for the duplicate and transfer. Log on to LPI and find a Transfer form and complete it.  Draw a cheque for stamp duty for the amount you have calculated and send the contract and transfer you have prepared for Walter to your law stationers with instructions to stamp the contract. Include a trust cheque drawn to Revenue NSW with an office cheque for the cost of the attendance (ABC Law Stationers) for the stamping ($65).
• On 29 April you write a cheque for the May rent for $1800. You also purchase 2 new printers from Office Works for $150 each and pay by office cheque. Complete all entries
•  On 4 May you prepare the trust account trial balance after completing all end of month reconciliations and balancing as required. You will need to prepare your own bank statement for trust and you may assume all cheques have been presented.

On the same day you prepare an office account trial balance. Complete all necessary documents and entries. Hand in the Transfer, costs disclosure agreement and any other loose leaf accounting document you are required to prepare by placing them inside the cover of your Workbook. . Exercise 7 Workbook

1. On 21 March you made numerous entries. Make sure you carry out all the following entries and do not miss any or your trial balances will be incorrect. Follow all the entry steps through and only do one entry at a time or you will miss out some of the steps.

You paid in a bank cheque for $40,000 as the licensee’s contribution to capital of the firm and arranged for an immediate clearance of this cheque. Capital paid in by a partner is a liability of the firm, since capital money is ‘owed’ to the partner who pays it in. It is therefore posted as a credit to the partner’s ledger account. This ledger is called ‘your name’ capital account. You paid Telecom $500 for installation of telephones. Telephone installation is an ‘expense’ and is therefore posted as a debit to a ledger account. This would be a private ledger. You will need to number these ledgers using the prefix ‘PL#’.  On the same day you purchased from Office Works the following office equipment and paid by office cheque

• • 4 Presario computers at $2,800 each

• • office stationery (letterhead) for $560

• • office furniture comprising 3 desks,3 chairs and 2 filing cabinets for a total of $4,050
  • 1 shredding machine for $325

• • 1 calculator for $55.

*Note that with the exception of the stationery, these purchases are payments of a capital nature to acquire assets. Being assets, they are posted to the debit of ledger accounts. Different ledger accounts are used for office machines and for office furniture, because these assets may carry different rates of depreciation. You cashed a cheque for $200 for petty cash. This amount is an ‘asset’ (being cash in hand). It is therefore posted to the debit of petty cash account in the office ledger. The petty cash book entries have been done for you in Appendix 04 and have been transferred to your workbook so do not make these entries again. But you must make all ledger and cash book entries and you will need to add your own ledger account numbers to the petty cash book example in your workbook. Check these entries as you carry out the following entries.

• • You bought from petty cash postage stamps to the value of $35.

• • You paid by office account cheque search fees of $41 to Legal Searchers for a search on account of J Churchill from Thomas.
  • You bought coffee and biscuits from petty cash for $9.50.

2. On 23 March your partner completed an advice for Terry Wales, handed a bill to the client, and received a cheque for $90 for costs.

If costs have been earned (or disbursements have been incurred) and a bill has been rendered, s53(1)(a) does not prevent you from putting money received in payment of the bill straight into your office account without first placing the money in trust, as it is not money which you receive ‘on behalf of another person’. This is to be distinguished from the situation where you send out a bill in advance (such as in a lessor/lessee or mortgagee/mortgagor situation) where the bill covers costs not yet earned or disbursements not yet incurred. When money comes in to pay this bill it must first go into trust. It cannot be transferred into office until the costs and disbursements have been incurred and the client has authorised payment into office.  

3. On 28 March you requested a pest inspection report on behalf of Churchill from Thomas paying $120 to Super Pest Control.

On the same day you paid wages to staff of $2000 and an electricity account to Integral Energy for $200.

4. On 29 March you spent $9.50 from petty cash to buy strata requisition forms. You will create another ledger for this to distinguish it from the ledger for stationery.

On the same date you paid for a building certificate by office account cheque to Burwood Council costing $135 in the Michaels matter. On the same date you took $900 in drawings and you cashed another cheque for $50 for petty cash. Drawings are usually posted to the debit of a licensee’s ‘Drawings’ account in the private ledger, rather than direct to the capital account. They are an ‘asset’ in that they reduce the firm’s liability to the licensee in respect of capital.

5. On 30 March you sent Joan Drew a bill for $400 for costs for the advice given to her. You ask her to provide you with an authority to draw those costs from trust. This is done to comply with s53(3)(a) and cl 20(4) as you cannot take these costs until the authority is received or 30 days has passed. You must await her instructions.
6. On 31 March you paid $1,800 by cheque to Epping Real Estate for office rent for April.

Following your instructions from Terry Payne to prepare a lease, you drew an office account cheque to Land and Property Information (LPI) a cheque for $10 for a title search.

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