Reference no: EM132310818

Assignment

Manual Accounting Task - Borderline Ltd

Part A - Manual Accounting

Required:

Complete the following tasks for the month of June 2018forBorderlineLtd.
• Read the attached information carefully.

• Enter the transactions into the appropriate journals - you are expected to use General and Special Journals.

• Post the transactions to the General Ledger accounts and balance the Accounts. (I recommend you also prepare a trial balance at this stage to check your work). Enter Subsidiary Ledgers as appropriate.

• Prepare a bank reconciliation, along with any general journal entries required.

• Complete any required adjusting and closing journal entries and prepare a post-closing trial balance.

• Prepare a Statement of Financial Performancefor June and a Statement of Financial Position as at 30 June 2018.

You must submit the following information:

• All journals and the full set of T accounts.
• Post Closing Trial Balance at 30 June
• Statement of Financial Performance for June
• Statement of Financial Position as at 30 June
• Bank Reconciliation at 30 June

• Company information for Borderline Ltd:

• Borderline Ltdrun a small to medium sizedwholesale business that sells building supplies to local builders and other retailers in Tasmania. The business was set up by James and Jess Jordenson who registered the company on 1 July 2016 by issuing 60 000 $1 par shares. James and Jess were allotted 52% of share capital and the balance to the general public.

• The company has not yet declared or paid any dividends. In the first year of its life the company made a profit after tax of $33 730.

• Borderline Ltd uses sales, purchases, cash receipts, cash payments and general journals along with subsidiary ledgers for debtors and creditors. The majority of their customers pay in cash but they do offer credit to a handful of valued customer. When Borderline makes credit sales, the terms are 3/10, n/10.

• Borderline rent a local warehouse and shopfront paying rent of $1500 per month.

• The company's shop fittings are being depreciated over 10 years with an estimated residual value of $5 400. The company's one Motor Vehicle, a delivery van, is being depreciated over 5 years with an estimated residual value of $5 000.

• The loan is a 5 year loan fully payable in five years time with interest to be paid at 9% per annum in arrears on the 1st July each year. Interest for the year to date (up to 31 May) has already been recorded in the accounts.

• Provision for doubtful debts is always adjusted at the end of each month to equal 3% of the value of total debtors at the end of that month.

• The company account for GST on an accrual basis and reconcile and pay GST every quarter. All figures are GST inclusive. GST was last paid in April this year and is next due to be paid in July 2018.

• Joenhysen Ltd prepare their financial reports on a monthly basis at a cost of $250.

• All the transaction information provided includes GST unless otherwise indicated.

• All figures are to be rounded to the nearest dollar.

The following transactions occurred in June 2018 for Borderline Ltd:

June 1 Received a cheque for $1 200 from Roar Ltd in full settlement of its
account and deposited it in the bank account
3 Sold inventory for $905(before any discounts have been applied) to Jones Ltd on credit (the company was given a trade discount of $80, then the normal credit terms) COGS was $420
4 Paid rent for June $1 500, chq no. 561 (Assume the rent is GST free)
5 Purchased inventory on credit from Pink $1 397, terms 2/10, n/15
6 Paid Yard $4 500 being full settlement of amount owing, chq no. 562
8 Received and deposited payment in full from Wide Ltd (no discount
allowed).
11 Paid Pink in full by cheque, chq no. 563
12 Paid telephone account by cheque of $320, chq no. 564
13 Received a cheque for $700 from Jones Ltd in part payment of theiraccount and deposited it in the bank account (no discount allowed).
14 Banked cash sales for the first two weeks of the month totalling $20 900 (COGS was $9 800).
14 Withdrew cash from the bank account to pay wages totalling $5 200, gross
wages were $7 400(wages before tax)
17 Paid $220 for cash register rolls and other stationery, chq no.565
18 Sold inventory on credit to Zane Ltd $2 750 (COGS was $1 200)
21 Sold inventory on credit to Wide $715 (COGS was $320)
23 Paid Purple Ltd $3 200 (no discount allowed), chq no. 566
27 Paid sundry expenses of $435 (GST free items), chq no. 567
28 Wrote off the full amount owed by Mane Ltd as a bad debt
29 Deposited Cash Sales of $27 500 ( COGS was $12 000)
30 Withdrew cash from the bank to pay wages of $5 600, gross wages were
$7 600.
30 Zane Ltd returned inventory which we had sold to them for $154 (COGS was $70).The returned inventory was in good condition and returned to the shelves and a credit note was issued to them.
30 Purchased inventory on credit from Purple Ltd of $4510 after being allowing a trade discount of $90 and on terms of 1/10, n/30
(COGS was $2 100)
30 Banked Cash Sales for the remainder of the month totalling $6 200.
30 Paid the balance of the account for Zale Ltd (no discount was allowed) chq
no. 568

Additional Information:
• Gross Wages owing at the end of the month total $1 320 and electricity owing for themonth of June is $1 100.
• Advertising owing for the month was $3 500
• Income tax for the month of June 2018 is estimated to be $12 430

At 31 May 2018 there were two outstanding cheques- cheque no. 498 for $650 and cheque no. 499 $320 and one outstanding depositof $5 400.

Part B - Interpretative Questions

There are 4 questions in Part B. Each question is worth 5 marks. As a guide no response to each question should exceed 200 words.You must write your answers in your own words. If you do use any other resources in preparing your answer you will need to acknowledge these as a reference (see the Unit Outline and the Faculty's Guide for Students).

(a) What does the information in the financial reports tell us about a company? What does the information in the reports you have prepared for Borderline Ltd tell us about this company?

(b) What is the difference between a pre and post adjusting/closing trial balance? Why would you want to prepare both?

(c) Explain the purpose of both adjusting and closing entries providing an example(s)for Borderline Ltd of both.

(d) What is the purpose of preparing a bank reconciliation? What information did you discover about this company by preparing a bank reconciliation?

Part C -Short Essay

James and Jess have been avid environmentalists for many years. While they lead personal lives that reflect this concern they wonder how this might become part of the way Borderline Ltd is conducted.

Write a brief essay indicating the following to assist James and Jess in advising their Board of Directors what actions the company might take. While together they hold 52% of the share capital they wish to be seen as both transparent and collegial in involving other interested parties.

1. What environmental concerns may need to be addressed
2. How these concerns might be addressed
3. What might be the financial impact of these decisions
4. Why you believe it is important to address these concerns

Attachment:- The Accounting Framework.rar