ACG11 - Balance Day Adjustments - Accounting for Business Assignment Help

ACG 11 - Balance Day Adjustments - Accounting for Business Assignment Help

Task:

QUESTION 1: Balance Day Adjustments
Louise Lace owns and operates a successful textile business specialising in cushions and quilt covers. The business also sells a memory foam pillow that is made only for The Best Sleep Ever Company that has recently featured in a number of health and wellbeing magazines. As a result of the recent positive media coverage of the excellent products sold by The Best Sleep Ever Company, Louise is too busy to undertake any record keeping for the company and has handed the record keeping over to the accounting practice where you work as a graduate accountant.

REQUIRED: ACG 11
It is now the end of the financial year and Louise requires you to undertake the following: Prepare the Balance Day Adjustment Journals for The Best Sleep Ever Company where required, in the proforma provided on the next page. Include narration (explanation) for each journal entry.
i) The prepaid rent was paid on 1 April 2019 and was Shop/Office rent for the four months ending 31 July 2019.

ii) Both the Delivery Van and Vacuum Packing Equipment are expected to be used evenly over their useful lives. The expected total useful lives and residual values of both assets is as follows:
 

iii) A physical stocktake of inventory at 30 June 2019 revealed $57,930 on hand.

iv) $1,300 of the recorded sales represents receipts for goods which will not be delivered until 2 July 2019.

v) It is estimated that 5% of the 30 June 2019 balance of Accounts Receivable is unlikely to be received.

vi) Upon receipt of the business’s bank statement, Louise realised that the business bank account had earned $51 interest on 30 June 2019 which had been directly paid into the bank account by the bank on that day. The accounting records need to be updated for this transaction.

vii) Louise had relied on word of mouth to promote her business to date however on 1 February 1 2019, Louise decided to use an advertising company to advertise her usiness and products and paid for the advertising campaign on that date. The advertising costs are $850 per month for a six month period.

viii) Sales staff wages owing but not paid as at balance day equals $842.

QUESTION 2: Financial Statement - ACG 11
Mr Wright owns Magnificent Interiors, a well known and highly regarded business by many interior designers. He is also a very good friend of Louise Lace and often stocks items from The Best Sleep Ever in his shop. The following Trial Balance for Magnificent Interiors has been prepared at year end by Mr Wright who likes to keep a hand in the bookkeeping side of the business.

QUESTION 3: Accounting Concepts - ACG 11
You are a graduate accountant working for EPK Chartered Accountants. One of the new clients to EPK Chartered Accountants is Miss Lace, who owns and operates The Best Sleep Ever Co. The Best Sleep ever Co specialises in cushions, quilt covers and a memory foam pillow manufactured specifically for her business.
Miss Lace has had a meeting with the Managing Partner of EPK today, and you were invited to attend the meeting. Miss Lace is extremely pleased with how The Best Sleep Ever Co is performing, and has decided to open up another shop interstate. She would like some advice regarding accounting for the significant amount of stock the business has. Miss Lace has decided that the interstate shop should hold inventory of each product to minimise freight costs, however she would like to know what is being held at each shop so that if a customer wants a product that is out of stock in one shop it can be transferred to the other shop.

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