FNSTPB401- Complete Business Activity and Instalment Activity Statements - BAS Theory - BAS and IAS Preparation - Sports Play Pty Ltd - Accounting and Finance Assessment Answer

FNSTPB401: Complete Business Activity and Instalment Activity Statements Accounting and Finance Assessment Answer

Assessment Task:

Part 1 – BAS Theory

Please login to online.appliededucation.edu.au using your student details and complete Part 1 online.

This is an online,3 hours supervised the exam. Before commencing the exam you are required to complete and submit the supervisor nomination form. Further details can be found on the student platform for this unit, under the Assessment tab.

Part 2 – BAS and IAS Preparation

Question 1: Sports Play Pty Ltd
For this assessment you are required to demonstrate your ability to process GST transactions and prepare a Business Activity Statement (BAS) and Instalment Activity
Statement (IAS) using a computerized accounting system. We recommend MYOB AccountRight V19 which can be downloaded from the student portal. Students wishing to use other software packages can contact their assessor for further information.

You have been appointed as the BAS Agent for Sports Play Pty Ltd. Refer to the following policies and procedures when completing this question.

Sports Play Pty Ltd

Accounting & GST Policies & Procedures:

Accounting Procedures
1. Sports Play is a retailer of sporting goods.
2. Sports Play Pty Ltd maintains an Accrual Accounting System.
3. The financial year is 1 July to 30 June. GST and Tax Reporting
4. Sports Play Pty Ltd is registered for GST, reporting Quarterly on an Accrual basis using the Full Reporting Method.
5. Preparation of the BAS return is the responsibility of the BAS Agent and lodged manually.
6. PAYG Withheld is reported and paid monthly.
7. The designated PAYG Instalment amount is paid quarterly.
8. The company pays Fringe Benefits Tax and is able to claim Fuel Tax Credits for backup electricity generation.

Question 1: Sports Play Pty Ltd
Task 1 – Chart of Accounts
Create a new company file in MYOB AccountRight or the accounting software of your choosing. The financial year you set should be used through all tasks in Question 1. All of your transactions will be recorded in the last month of your financial year. Conversion Month MUST BE July. Record your financial year in the box below. Your rates and regulations must match your financial year used.

Financial Year used: Click here to enter text.
Edit the chart of accounts list and set up default tax codes for each account required as you would expect for a sporting retailer business that is registered for GST. This includes deleting excessive accounts not required, renaming ledger account names if needed. For example: if you have a selected chart of accounts list that displays accounts such a Superannuation Fund #1 and has 5 of them, then this is excessive and incorrect. Excessive accounts need to be removed and the one account would need to be renamed to the correct liability name. This situation can happen across assets, liabilities, income and expenses.

Task 2 - Process Transactions for June 20XX
Process the following transactions for June 20XX:
a) 1 st June: Purchased a new Nissan Navara dual cab ute from Northern Nissan and paid via EFT. Allow the bank account to go into overdraft.

Details of the purchase:
Cost: $45,000    incl. GST
Dealer Delivery: $1,200 incl.   GST (included as part of cost of the asset)
Stamp duty $1,300   GST Exempt
Registration: $600    GST Free

What is the Luxury Car Tax threshold at the time of this purchase? Has LCT been included in the cost of the ute?

List two (2) methods you can use to clarify that you have correctly categorised and coded the GST for this purchase.

Craig has asked you whether a fringe benefits tax return needs to be lodged for this car. What would your advice be (in your role as a BAS Agent)?

b) 4 th of June: Sale of sporting goods delivered domestically to International Sports – $11,000. This amount remains unpaid.

c) 5 th June: Sale of sporting goods delivered domestically to International Sports – $4,000. This amount remains unpaid.

d) 7 th June: Sale of Goods shipped internationally to a customer based in China called “International Sports” – $16,500.

e) 14th June: Received Payment of $16,500 from International Sports for 7th June Sale.

f) 14th June: Paid fortnightly wages to Craig Chapman of $2,000 Gross (Employee).

a. Do not set up the payroll system in your software. Instead, process a cash disbursement using the following accounts/amounts. No allowance is made for
leave in this exercise.

b. Craig has a PAYG Withholding variation of 30%. Has this amount been calculated correctly?

c. What legislation dictates the current rate of superannuation guarantee, and what is the current rate?

d. Review the superannuation guarantee amount for Craig. Has the amount been calculated correctly?

g) 28th June: Paid wages to Craig Chapman, amounts as per the previous fortnight.

h) 28th June: Paid Office World via Electronic Funds Transfer $320 (for A4 paper $220 and bottled water $100). Note total GST on this invoice is $20.

i) 28th June: Enter a sale of sporting goods delivered domestically to customer “International Sports” – $18,000. This amount remains unpaid.

j) 29th June: Enter weekly sales from store of $17,000 incl GST. Deposited as cash on 29th June to bank account.

k) 30th June: Paid fuel account for the quarter. 620 litres of diesel at $1.42 = $880.40 Paid by visa card to Ampol.

l) The fuel purchase above was used for backup electricity generation. The client will be claiming the fuel tax credits in the current BAS. A journal needs to be processed to claim the credit on the 30th June. Refer to the ATO website for a table showing available Fuel Taxn Credit Rates for the current year.

m) 30th June: Nigel Smith rendered his invoice for office cleaning without an ABN number. Repeated attempts to get his ABN have failed. Pay his account in strict accordance with ATO policy in relation to failure to furnish an ABN number. The total invoice amount was $195.

n) 30th June: Paid Power Bill of $990 inc GST to “Power Company”

o) 30th June: Paid water rates of $55 to Water Corporation. No GST was applicable on this invoice.

p) 30th June: Shareholders deposited $20,000 into bank account from their personal savings. This was to keep the business in a financially stable position. Use a Loan account (Current Liability) to record the Shareholders loan.

q) It was noted that the sale of $4,000 on 5th June (transaction c) was actually shipped internationally to the customer overseas. Recode transaction to correct error.

r) The power bill on 30th June for $990 had GST of $85 as there was a GST Free component. Correct the earlier transaction.

Task 3 – BAS Preparation and Reporting
a) Prepare the BAS return for the June quarter for Sports Play Pty Ltd, including the following obligations:

• PAYG Instalments of $5,200 per quarter

• FBT installment of $1,500 per quarter

• Fuel tax credits
Refer to the policies and procedures for any further BAS set up details.

b) Reconcile the amounts on your BAS return to the general ledger in your accounting system

Task 4 – BAS Payment

Pay the above BAS Liability by cheque and enter the transaction into your accounting software then attach a screenshot of this payment entry. Label this Printout 8
If you have an issue trying to “print” this cheque try using your Print button and choose “Microsoft XPS” or adobe pdf as the file type. This will then allow you to save the file electronically. Alternatively, paste a screenshot into a word document.

a) What other payment methods can you use to pay your liability to the ATO? If required refer to the ATO website for acceptable payment methods.

b) If the accountant prefers placing the BAS liability in a Provision account, show the journal entry you would process here:

c) If the business no longer has access to an overdraft facility, is Sports Playable to pay their BAS obligation to the ATO?

What options are available to the company if they don’t have sufficient funds available?

Task 5 – BAS Procedures

Create a checklist of the procedures and checks you would follow to do the BAS for this client. Remember the checklist should include prior checks and processes as well as the BAS procedures.

Task 6 – IAS for July
Process the following payroll transactions Sport Play Pty Ltd for July

a) 12th July: Paid wages to Craig Chapman, amount as per the pay run on 14th June.

b) 26th July: Paid wages to Craig Chapman, amounts as above.

c) Prepare the Sports Play IAS return for July

d) Pay the above IAS Liability by cheque and enter the transaction into your accounting software then attach a screenshot of this payment entry. Label this Printout 10

Question 2: John Smith – Sole Trader
To complete this assessment you are required to complete and submit a manual Business Activity Statement form for John Smith (which can be downloaded from the student portal under the Assessment tab for the unit). You do not require access to a computerised accounting system for this question.

Task 7 – Manual BAS Preparation
Your client, John Smith, is a sole trader providing IT consulting services to local clients. John is
registered for GST on a quarterly cash basis and is eligible for Simpler BAS reporting. You have been
appointed by John as his BAS Agent.
John has provided you with the following figures for the December 2017 quarter. Amounts are
inclusive of GST where applicable:
Revenue
Consulting Income            $ 22,000
Bank Interest received          $ 50
Expenses
Accounting Fees                 $ 660
Bank Fees                          $ 120
Computer Purchase           $ 880
Depreciation                       $ 500
Office Expenses                $ 440
Petrol                                 $ 770
Stationary                          $ 330
Office Furniture                 $ 200
John has also provided you with the following information:

b) Research the reporting requirements for Simpler BAS and answer the following questions: What is the GST turnover threshold for Simpler BAS?

What GST information is required to be reported for the Simpler BAS method?

Provide a link to the website you used to clarify these requirements?

c) Complete the quarterly Business Activity Statement for John Smith (can be downloaded from the student portal) and submit to the ATO (your Applied Education Assessor)

d) Referring to Task 7c, on what date is the BAS return due for John Smith?

c) Complete the quarterly Business Activity Statement for John Smith (can be downloaded from the student portal) and submit to the ATO (your Applied Education Assessor)

d) Referring to Task 7c, on what date is the BAS return due for John Smith?

 

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