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Completing Trust Account Records Assignment
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Assignment Task
PART A - Creating source documents (Receipts, deposit slips, cheques)
Scenario
You are the agency principal of ATA Real Estate. The agency operates a trust account for the sales and property management activities carried out by the agency. The trust account is opened with Westpac Bank (Valkyrie branch).
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DATE |
TRANSACTION |
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1 September 20XX |
Mark Gibson pays a deposit of $30,000 on 3 Dairy Rise Court. He is buying the property from Dan and Lily Watson. The deposit is paid by cheque, drawn on the NAB Bank at Valkyrie. The purchase price of the property is $600,000. The ledger reference number is W1. |
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1 September 20XX |
Jim Dalton pays 2 weeks rent of $800 by EFT. Jim is renting Unit 12, 7 Rosepetal Road, Valkyrie. The landlord is the Hudson Family Trust, ledger reference number is H1. Jim’s rent is due today. |
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2 September 20XX |
Mary Clarke pays 1 weeks rent, $500 in cash on Unit 14, 7 Rosepetal Road, Valkyrie. The landlord is Bronson, and the ledger reference number is B1. Mary’s rent was due yesterday. |
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4 September 20XX |
Mark Gibson terminates the contract on 3 Dairy Rise Court within the 5 business day cooling off period. You have received written instructions from the seller to refund the deposit, less the 0.25% termination penalty. The termination penalty (payable to the seller) must also be paid to the seller. |
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5 September 20XX |
Jennifer Mitchell pays a $50,000 deposit on 3 Dairy Rise Court by bank cheque, drawn on the ANZ Valkyrie. W1. |
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5 September 20XX |
Desiree Hill pays two weeks rent in advance on 54 Highview Crest ($1,000) in cash. Desiree’s rent has already paid up to (and including) 10 September 20XX. The landlord is M Saunders, and the ledger reference number is S1. |
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8 September 20XX |
Your agency has been requested in writing by Jock Hudson, owner of Unit 12, 7 Rosepetal Road to pay Valkyrie Shire Council, $200 for part payment of rates. Ledger reference is H1 |
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9 September 20XX |
Robin Gibson, a salesperson with your office, has secured a new listing. The property is 4 Orange Terrace, Valkyrie. The sellers James and Libby Russell have paid advertising and marketing expenses of $2,000 by cheque (drawn on First Bank Valkyrie). Ledger reference number is R1. |
Receipt
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C Lewis Licensee ATA Trust Account Trust Account Receipt No: 2000 Date: 1 September 20XX
Cash / Cheque / Electronic Transfer Cheque details: Drawer: M Gibson; Bank: NAB Valkyrie Received from: M Gibson
Particulars: Deposit on 3 Dairy Rise Court, Valkyrie. Sellers D & L Watson
Amount: Thirty thousand dollars $ 30,000.00 Account: D & L Watson Signed: _________________________________ Ledger Ref. No: W1 |
Deposite Silps (for Cash and Cheque Deposite)
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Westpac (Valkyrie) Deposit SLIP Date: 1/9/XX |
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Drawer |
Bank |
Branch |
Amount ($) |
|
Mark Gibson |
NAB |
Valkyrie |
$30,000 |
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|
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|
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Total cheques Cash Total Paid in by: _______________________________________ |
$ 30,000 $ 0 $ 30,000 |
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Cheques
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Date: 4 September 20XX
Payee: M Gibson
Deposit refund 3 Dairy Rise Court. $30,000 less termination penalty ($1,500)
$28,500.00
Ledger ref: W1 #0001 |
Westpac (Valkyrie) Date: 04.09.XX
Payee: Mark Gibson
Amount: Twenty eight thousand, five hundred dollars only $28,500.00 C Lewis Licensee ATA Trust Account _________________________________________ #0001 |
PART B - Entering cash receipts and cash payments into trust account journals
Instructions
Review the list of transactions below (this is the same list of transactions from Part A)
You are required to record each transaction into either the Trust Cash Receipts Journal or the Trust Cash Payments Journal. (The first entry for each journal has been created as an example for you)
Please note:
- Payments into the ATA Real Estate Trust Account need to be recorded in the Trust Cash Receipts Journal
- Payments out of the ATA Real Estate Trust Account need to be recorded in the Trust Cash Payments Journal
- The following are the Ledger Folio numbers for the various clients:
- Trust Bank – TB1
- D & L Watson – W1
- Hudson Family Trust – H1
- Bronson – B1
- M Saunders – S1
- J and L Russell – R1
List of transactions
|
DATE |
TRANSACTION |
|
1 September 20XX |
Mark Gibson pays a deposit of $30,000 on 3 Dairy Rise Court. He is buying the property from Dan and Lily Watson. The deposit is paid by cheque, drawn on the NAB Bank at Valkyrie. The purchase price of the property is $600,000. The ledger reference number is W1. |
|
1 September 20XX |
Jim Dalton pays 2 weeks rent of $800 by EFT. Jim is renting Unit 12, 7 Rosepetal Road, Valkyrie. The landlord is the Hudson Family Trust, ledger reference number is H1. Jim’s rent is due today. |
|
2 September 20XX |
Mary Clarke pays 1 weeks rent, $500 in cash on Unit 14, 7 Rosepetal Road, Valkyrie. The landlord is Bronson, and the ledger reference number is B1. Mary’s rent was due yesterday. |
|
4 September 20XX |
Mark Gibson terminates the contract on 3 Dairy Rise Court within the 5 business day cooling off period. You have received written instructions from the seller to refund the deposit, less the 0.25% termination penalty. The termination penalty (payable to the seller) must also be paid to the seller. |
|
5 September 20XX |
Jennifer Mitchell pays a $50,000 deposit on 3 Dairy Rise Court by bank cheque, drawn on the ANZ Valkyrie. Sellers are Dan and Lily Watson |
|
5 September 20XX |
Desiree Hill pays two weeks rent in advance on 54 Highview Crest ($1,000) in cash. Desiree’s rent has already paid up to (and including) 10 September 20XX. The landlord is M Saunders, and the ledger reference number is S1. |
|
8 September 20XX |
Your agency has been requested in writing by Jock Hudson, owner of Unit 12, 7 Rosepetal Road to pay Valkyrie Shire Council, $200 for part payment of rates. Ledger reference is H1 |
|
9 September 20XX |
Robin Gibson, a salesperson with your office, has secured a new listing. The property is 4 Orange Terrace, Valkyrie. The sellers James and Libby Russell have paid advertising and marketing expenses of $2,000 by cheque (drawn on First Bank Valkyrie). Ledger reference number is R1. |
PART C - Recording transactions in ledgers
Instructions
Review the Trust Cash Receipts Journal and the Trust Cash Payments Journal below.
For each entry you see in the Trust Cash Receipts Journal and the Trust Cash Payments Journal, create an entry in the Trust Bank Ledger (TB1) and one of the following Client Ledgers (as applicable to the transaction):
- D & L Watson (W1)
- Hudson Family Trust (H1)
- Bronson (B1)
- M Saunders (S1)
- J and L Russell (R1)
Trust Cash Receipts Journal
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Trust Cash Receipts Journal September TCR 1 |
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|
Date |
Rec. No. |
Received from |
Account |
Particulars |
Ledger Folio |
Amount |
Deposit in Bank |
|
1/9/ XX |
2000 |
M Gibson |
D & L Watson |
Deposit on 3 Dairy Rise Court |
W1 |
$30,000 |
|
|
1/9/XX |
2001 |
J Dalton |
Hudson F Trust |
2 weeks rent, |
H1 |
$800 |
$30,800 |
|
2/9/ XX |
2002 |
M Clarke |
Bronson |
1 wks rent, 14/7 Rosepetal Rd |
B1 |
$500 |
$500 |
|
5/9/ XX |
2003 |
Mitchell |
D & L Watson |
Deposit on |
W1 |
$50,000 |
|
|
5/9/ XX |
2004 |
D Hill |
Saunders |
2 wks rent. |
S1 |
$1,000 |
$51,000 |
|
9/9/ XX |
2005 |
J & L Russell |
Russell |
Advertising for |
R1 |
$2,000 |
$2,000 |
Trust cash Payment Journal
|
Trust Cash Payments Journal September TCP 1 |
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|
Date |
Chq No. |
Paid to |
Account |
Particulars |
L Folio |
Amount |
|
4/9/ XX |
0001 |
Gibson |
Watson |
Refund deposit 3 Dairy Rise Ct. Less Termination penalty |
W1 |
$28,500 |
|
4/9/ XX |
0002 |
Watson |
Watson |
Termination penalty 3 Dairy Rise Ct |
W1 |
$1,500 |
|
8/9/ XX |
0003 |
Valkyrie Shire Council |
Hudson Family Trust |
Part Payment of rates Unit 12, 7 Rosepetal Road |
H1 |
$200 |
PART D - Completing a bank reconciliation 1
Instructions
You are required to prepare a Bank Reconciliation Statement for the ATA Real Estate Trust Account as at 15 September 20XX.
As you may recall, the bank reconciliation process involves checking the agency’s internal trust accounting records against the bank’s records for the agency’s trust account at a specific point in time. This is done by comparing the agency’s internal trust account balance against the balance in the bank statement for the trust account on a given date.
To refresh your memory on bank reconciliations, refer to Part [6.6] in your Cluster 7 Learner Notes.
Review the following records below:
- Trust Cash Receipts Journal
- Trust Cash Payments Journal
- Trust Bank Ledger.
The above records contain information about all the money going into and out of the ATA Real Estate Trust Account for the month of September 20XX (and how much money should be in the trust bank account).
Also, review the Bank Statement for the ATA Real Estate Trust Account provided below (this shows how much money is actually in the trust bank account).
Bank Statement
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Westpac Valkyerie ATA Real Estate Bank statement as at 15 September 20XX Account no. ________________ |
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Date |
Particulars |
Debit |
Credit |
Balance |
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01.09.XX |
Deposit (Gibson) |
|
$30,000.00 |
$30,000.00 CR |
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01.09.XX |
Deposit |
|
$800.00 |
$30,800.00 CR |
|
02.09.XX |
Deposit |
|
$500.00 |
$31,300.00 CR |
|
05.08.XX |
Deposit |
|
$51,000.00 |
$82,300.00 CR |
|
09.09.XX |
Deposit |
|
$2,000.000 |
$84,300.00 CR |
|
09.09.XX |
Chq No 0001 |
$28,500.00 |
|
$55,800.00 CR |
|
09.09.XX |
Chq No 0002 |
$1,500.00 |
|
$54,300.00 CR |
PART E - Completing a bank reconciliation 2
Instructions
You are required to prepare a Bank Reconciliation Statement for Best Realty as at the end of the month.
To refresh your memory on bank reconciliations, refer to Part [6.6] in your Cluster 7 Learner Notes.
Review the following records below:
- Trust Bank Ledger
- Bank Statement
The Trust Bank Ledger contains information about all the money going into and out of the Best Realty Trust Account for the month of September 20XX (and how much money should be in the trust bank account).
The Bank Statement for the Best Realty Trust Account shows how much money is actually in the trust bank account.
PART F - Completing a bank reconciliation 3
Instructions
You are required to prepare a Bank Reconciliation Statement for Smart Realty as at the end of the month.
To refresh your memory on bank reconciliations, refer to Part [6.6] in your Cluster 7 Learner Notes.
Review the following records below:
- Trust Bank Ledger
- Bank Statement
The Trust Bank Ledger contains information about all the money going into and out of the Smart Realty Trust Account for the month of January 20XX (and how much money should be in the trust bank account).
The Bank Statement for the Smart Realty Trust Account shows how much money is actually in the trust bank account.
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