Auxerre Accessories Pty Ltd has been in Business in Chatswood - Accounting Assignment Help

Assignment Task:

Task:

Company Background

Auxerre Accessories Pty Ltd has been in business in Chatswood, NSW since July, 2015. The company was started by Ryan Lindwall and operates a large showroom which sells home accessories from all over Australia on a wholesale basis to other home furniture and accessories outlets on both credit and cash terms. The company's Share Capital consists of 3,402,000 Ordinary Shares, originally issued at $1 each and which are owned by various members of the Lindwall family. The company has employed a combination of sales and administration staff to run the business since July, 2015. The company has generally been profitable since it was originally formed and has reasonable liquidity and solvency.
Accounting System Information & Procedures

• The company has a financial year end of 30 June and prepares adjusting entries at the end of the financial year.
• To ensure efficiency of its accounting procedures, the company uses the following Special Journals to maintain its accounting records:
• Sales Journal (SJ): to record all sales of Inventory on credit
• Purchases Journal (PJ): to record all Purchases of Inventory on credit
• Cash Receipts Journal (CRJ): to record all Cash Receipts
• Cash Payments Journal (CPJ): to record all Cash Payments
• General Journal (GJ): to record all transactions other than the above.
• Business transactions are recorded for Auxerre Accessories Pty Ltd on a daily basis in one of these five journals in the accounts.
• Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted immediately to the relevant ledger account if they are entered into the general journal, the “other” column of the Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the end of the month and then posted to the appropriate accounts. The company uses a periodic inventory system.
• In practice, the company would be required to collect and pay Goods and Services Tax (GST) on its sales and purchases. However, for the purposes of this exercise, GST has been excluded.
• Please Note: All amounts in this practice set can be rounded up to the nearest dollar.
• UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS
• As at 31 May 2021
• Acc. Account Debit ($) Credit ($)
• 100 Cash at Bank 1,843,884 101 Accounts Receivable Control 714,420 102 Stationery Supplies 453,033 103 Inventory 2,343,600 104 Prepaid Rent (paid 1 March 2021) 2,218,860 105 Prepaid Insurance (paid 1 Nov. 2020) 34,020 150 Showroom Fittings 1,530,900 151 Accumulated Depreciation – Showroom Fittings 160 Equipment 519,750 161 Accumulated Depreciation - Equipment 255,150
• 200 Accounts Payable Control 460,782
• 201 Interest Payable 202 Utilities Payable 203 Wages Payable 204 Salaries Payable 205 Tax Payable 206 Dividend Payable 250 Mortgage Loan (due 31 July 2036) 1,820,826
• 300 Share Capital 3,402,000
• 301 Retained Profits (1 July 2020) 2,890,566
• 302 Dividends Declared 303 Profit and Loss Summary 400 Sales Revenue 12,137,202
• 401 Sales Discounts (Discount Allowed) 93,177 402 Sales Returns and Allowances 26,271 500 Purchases 5,780,565 501 Purchase Discounts (Discount Received) 72,576
• 502 Purchase Returns and Allowances 30,429
• 600 Freight-Out 8,694 601 Wages Expense - Sales Staff 2,904,363 602 Depreciation Expense – Showroom Fittings 603 Depreciation Expense - Equipment 604 Stationery Expense 605 Rent Expense 606 Insurance Expense 607 Advertising Expense 131,544 608 Interest Expense 609 Utilities expense 175,392 610 Tax Expense 611 Sundry Expenses 9,072 612 Salaries Expense – Office Staff 2,281,986 613 Bad Debts Expense 21,069,531 21,069,531
• SUBSIDIARY LEDGERS
• Schedule of Accounts Receivable
• As at 31 May 2021
• Note: Auxerre Accessories Pty Ltd offers all customers Credit Terms 2/10, n/30, unless otherwise stated
• Acc. No. Account Invoice date Amount ($)
• 101-1 Avignon Chandaliers30 May 285,768
• 101-2 Bourges Furnishings 20 May 144,396
• 101-3 Cote Lamps 28 April 195,426
• 101-4 Dijon Mirrors 14 May 88,830
• 714,420
• Schedule of Accounts Payable
• As at 31 May 2021
• Acc. No. Account Invoice date Credit terms Amount ($)
• 200-1 Renoir Home Products 30 May 2/10, n/60 130,410
• 200-2 Watteau Home Products 27 May 1/10, n/45 330,372
• $460,782
• TRANSACTIONS
• For June 2021
• Date Transaction
• Week
• June 1 Avignon Chandaliers paid the balance of its account and were given a discount of $1,904 by us.
• Delivered goods to Bourges Furnishings for $204,876 and issued invoice #351. Issued cheque #810 to pay
• $22,680 for delivery costs of inventory to their premises.
• June 4 Paid the amount owing to Renoir Home Products and Cheque #811 was sent to the Creditor.
• June 7 Total Cash Sales for the week were $57,834.
• Week
• June 9 Cote Lamps paid $82,026 toward the amount it owes us.
• June 10 Made a purchase from Watteau Home Products for $175,770 for inventory: Terms are 1/10, n/45 and date of invoice was 10 June.
• The firm issued cheque #812 for the purchase of Stationery Supplies amounting to $16,632.
• June 11 Avignon Chandaliers purchased inventory of $206,388. Invoice #352 was issued.
• June 12 Some of the home accessories purchased on 10 June from Watteau Home Products were the incorrect colour. We returned the inventory in exchange for a Credit Note of $56,700.
• June 14 Total Cash Sales for the week were $79,002.
• Week
• June 15 Paid office staff salaries of $220,374. Cheque #813 was issued for payment. Cheque #814 was issued to pay sales staff wages, $187,110.
• June 16 Purchased inventory from Renoir Home Products for $289,170. The invoice was dated 16 June. Credit terms are 2/10, n/30.
• June 18 Sold inventory to Cote Lamps for $373,086 on invoice #353. Issued cheque #815 to pay for delivery costs of $28,350.
• June 19 The company issued cheque #816 to pay the amount still owing to Watteau Home Products
• June 21 Total Cash Sales for the week were $75,033.
•  
• Week 4
• June 23 Cote Lamps returned $70,686 of inventory purchased on 18 June. Issued a Credit Note for the transaction.
• June 24 Issued Cheque #817 for $37,800 to pay for the annual gift the company donates to the World Kids Charity Fund. The gift is to be recorded as a Sundry Expense in the accounts.
• June 25 Purchased inventory from Watteau Home Products, worth $281,610. The terms were 1/10, n/45. Date of the invoice was 25 June.
• June 26 Received the total amount owing from Cote Lamps.
• June 28 Total Cash Sales for the week were $117,936.
• Week
• June 29 Bourges Furnishings paid the entire balance of its still outstanding account.
• June 29 Reduced $226,800 of the amount owing to Watteau Home Products and Cheque #818 was issued.
• June 29 A dividend of $531,300 was declared to the company shareholders. However, the dividend will not be paid until 28 November 2021.
• Paid sales staff wages, $187,110 and Cheque #819 was issued to meet the payment.
• June 30 Issued additional shares to the Shareholder owners of the Company for cash, and $378,000 was received and banked from the share issue.
• Total Cash Sales for the week were $70,308.
• INSTRUCTIONS
• Enter the transactions for Weeks 1 – 5 into the appropriate Journal for the month of June 2021. Next, post all the Journal transactions to the ledger accounts as specified in the “Account System Information” section of the introduction.
• Total all Special Journal columns and post to the appropriate ledger account at the end of the month.
• Prepare the unadjusted Trial Balance as at 30 June 2021 on the Worksheet provided.
• Prepare the adjusting entries shown on page 10 in the General Journal and post to the relevant ledger accounts. Now enter the adjustments in the relevant worksheet columns and prepare an adjusted Trial Balance.
• A Stocktake on 30 June 2021 indicates that the balance of Closing Inventory is $4,249,476. Use this information to complete the remaining columns of the worksheet.
• Use the worksheet to prepare the Income Statement and Balance Sheet.
• Complete the Schedule of Accounts Receivable and Schedule of Accounts Payable. Ensure the balances agree with the totals in the control accounts.
• Prepare closing entries and post to the relevant general ledger accounts.
• Complete the post-closing Trial Balance as at June 2021.
• ADJUSTING ENTRIES
• The Showroom Fittings were installed on 1 July, 2020. They have a useful life of 9 years and no salvage value.
• The Straight-Line method is used to depreciate the Showroom Fittings.
• The Equipment was installed on 1 July, 2015. They have a useful life of 10 years and estimated salvage value of $9,450. The Straight-Line method is used to depreciate the Equipment.
• Twelve months of Rent was prepaid on 1 March, 2021. Of the original prepaid amount, $739,620 worth of Rent has now expired.
• A count of Stationery Supplies indicates that $256,095 still remain on hand at year end.
• A one-year Insurance policy was purchased on 1 November 2020 for $34,020.
• Interest on the ANZBank Mortgage Loan is charged at 7% per annum and is paid annually on 1 August (the interest expense should be rounded up to the nearest dollar). The ANZ Bank Mortgage Loan was originally taken out on the 1 August, 2020.
• The company has been informed that Dijon Mirrors has been declared bankrupt and Auxerre Accessories
• Pty Ltd has agreed to write off the amount owing as a Bad Debt. The company uses the direct write-off method to account for any Bad Debts in the books.
• A telephone bill for $19,278 for June was received on 5 July, 2021. The amount has not yet been recorded. The company records them as a Utilities Expense.
• Office Staff are paid once per month, $220,374. The Office Staff were last paid on the 15 June, 2021. Exactly half of one month Office Staff wages are still owing.
• Sales Staff are paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June, 2021. One day of the wages bill amounting to $13,363 is still owed to the Sales Staff.
• The Accountant of the company has estimated Tax Payable following the inclusion of certain tax adjustments for the year ended 30 June, 2021 will only be $259,203. This amount is to be paid on 31 October, 2021.

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