Page 1 of 16
ACC1AIS – Individual Assignment
2020
This assignment requires you to create a new business, input transactions, and generate
financial statements and reports using Xero. This assignment question sheet should be used
in conjunction with the weekly Xero help-sheets which explain in more detail the steps
required to complete the exercises below.
Task Overview
The company for which you will be working in this assignment distributes, sell and repairs toys
for kids. You will be recording transactions for the month of May 2020.
The assignment contains five separate sections, one for each week of May. You should work
though these sections sequentially. Once you have completed all the exercises you should
prepare the requirements listed on page 12. Finally, you are required to submit your
assignment files and reports via the assignment submission box on LMS. You are required to
submit your assignment by Sunday (24 May 2020), 11.59 pm.
Set up Company
Your first task is to set up a new business in Xero – you must use your Student ID Number and
FULL Name as the Business name. Refer to the Workshop 5 Help-sheet if you need detailed
help to set up a new company in Xero.
You are the accountant and owner of a business which is registered for GST purposes. You
previously used to use another software as your main accounting system. However, as a result
of changes in technology, you have decided to move onto a cloud-based accounting software
platform, XERO. To transfer from your previous accounting package to XERO you are required
to transfer balances in your previous system onto XERO. The conversion date (date when you
stop using your previous system and start using XERO) is 1 May 2020, and the Trial Balance as
at 30 April 2020 is as below:
Page 2 of 16
| Trial Balance as at 30 April 2020 |
||
| Account | Debit | Credit |
| Cash at bank | $114,608.24 | |
| Accounts receivable | $91,531 | |
| Prepaid Fire insurance | $20,000 | |
| Inventory | $110,421.1 | |
| Store Building | $540,000 | |
| Accumulated Depreciation – Store Building | $272,250 | |
| Delivery Van | $69,300 | |
| Accumulated Depreciation – Delivery Van | $35,805 | |
| Accounts payable | $56,981.30 | |
| Loan payable – Building Head Office | $275,812.4 | |
| Unearned delivery revenue | $18,700 | |
| Capital | $286,500 | |
| Sales revenue | $83,210 | |
| Interest expense – 8% annually | $1,838.75 | |
| Fire Insurance expense | $2,000 | |
| Salaries expense | $25,080 | |
| Warehouse rent expense | $2,100 | |
| telecommunication expense | $550 | |
| GST | $64,311.11 | |
| Allowance for Doubtful Debts – 10% | $8,321 | |
| Provision for warranty – 5% | $4,160.5 | |
| $1,041,740.2 | $1,041,740.2 | |
| All figures included within the Trial Balance are GST exclusive except for accounts receivable and accounts payable. |
Accounts receivable: 100 items of SKU02770, 150 items of SKU02771, 80 items of SKU02772,
70 items of SKU02773, 100 items of SKU02774, 110 items of SKU02775, 110 items of
SKU02776 are sold on 15 April 2020 on credit to Kay Bee Toys. Due date is 18 May 2020.
| Items sold on 15 April 2020 | Sales price (incl. GST) | Total receivable (incl. GST) |
| SKU02770 – 100 items | $152.95 | $15,295 |
| SKU02771 – 150 items | $155.45 | $23,317.5 |
| SKU02772 – 80 items | $133.00 | $10,640 |
| SKU02773 – 70 items | $84.45 | $5,911.5 |
| SKU02774 – 100 items | $117.49 | $11,749 |
| SKU02775 – 110 items | $88.85 | $9,773.5 |
| SKU02776 – 110 items | $134.95 | 14,844.5 |
| Total incl. GST | 91,531.00 |
Page 3 of 16
Accounts payable: 150 items of SKU02770, 160 items of SKU02771, 110 items of SKU02772,
100 items of SKU02773, 100 items of SKU02774, 140 items of SKU02775, 140 items of
SKU02776 are purchased on 20 April 2020 on credit from Wonder Workshop. Due date is 20
May 2020.
| Items purchased on 20 April 2020 |
Purchase price (incl. GST) | Total payable (incl. GST) |
| SKU02770 – 150 items | $76.47 | $11,470.5 |
| SKU02771 – 160 items | $77.72 | $12,435.2 |
| SKU02772 – 110 items | $66.50 | $7,315 |
| SKU02773 – 100 items | $42.22 | $4,222 |
| SKU02774 – 100 items | $58.74 | $5,874 |
| SKU02775 – 140 items | $44.42 | $6,218.8 |
| SKU02776 – 140 items | $67.47 | $9,445.8 |
| Total incl. GST | $56,981.30 |
Inventories on hand at 30 April 2020: 450 items of SKU02770, 210 items of SKU02771, 330
items of SKU02772, 130 items of SKU02773, 200 items of SKU02774, 280 items of SKU02775,
150 items of SKU02776, and 140 items of SKU02777.
| Items on hand 30 April 2020 | Purchase price (excl. GST) | Total excl. GST |
| SKU02770 – 450 items | $69.52 | $31,283.2 |
| SKU02771 – 210 items | $70.65 | $14,837.46 |
| SKU02772 – 330 items | $60.45 | $19,950 |
| SKU02773 – 130 items | $38.38 | $4,989.63 |
| SKU02774 – 200 items | $53.40 | $10,680 |
| SKU02775 – 280 items | $40.38 | $11,306.90 |
| SKU02776 – 150 items | $61.34 | $9,200.45 |
| SKU02777 – 140 items | $58.38 | $8,173.46 |
| Total excl. GST | 110,421.10 |
Page 4 of 16
Further Information
| Salaries expense | $25,080 per month |
| Warehouse rent expense | $2,310 per month incl. GST |
| Telecommunication expense | $605 per month incl. GST |
| Allowance for doubtful debts | 10% of the Accounts Receivable |
| Provision for warranty | 5% of the sales revenue |
| Interest expense on loan (Building Head Office) | Calculated at 8% per annum |
| Delivery Van | Purchased on 1 March 2015 at $76,230 incl. GST, with a useful life of 10 years, and no residual value. It is depreciated using the straight-line method. |
| Store Building | Purchased on 1 April 2010, at $594,000 incl. GST, with a useful life of 20 years, no residual value. It is depreciated using the straight-line method. |
| Fire insurance | On 1 March 2020, you paid $26,400 incl. GST for a twelve-month fire insurance policy to Berkshire Group. |
Page 5 of 16
Items
Refer to the Workshop 2 Help-sheet if you need detailed help to create new items.
| Item code | Item name | Buy price (Incl. GST) |
Sell price (Incl. GST) |
| SKU02770 | Man TGA low loader truck with JCB backhoe loader |
$76.47 | $152.95 |
| SKU02771 | Scania R-Series Liebherr Crane With Light Sound |
$77.72 | $155.45 |
| SKU02772 | CAT Mini Excavator Vehicle | $66.50 | $133.00 |
| SKU02773 | Snowplow | $42.22 | $84.45 |
| SKU02774 | MACK Granite Halfpipe Dump Truck | $58.74 | $117.49 |
| SKU02775 | JCB 5CX Eco Backhoe Loader | $44.42 | $88.85 |
| SKU02776 | Truck Vehicle – Mack Granite Truck Power Fuel |
$67.47 | $134.95 |
| SKU02777 | Mack Granite Garbage Truck – Green | $64.22 | $128.45 |
Page 6 of 16
Week 1: 1 May to 5 May, 2020
| Date | Details |
| 1 May | You borrowed $40,000 from the Northern Bank on a short-term loan. The money is to be used to purchase plastic welding machinery. The principle, plus 8% annual interest, will be paid in 4 months. |
| 1 May | You purchased 20 items of SKU02770, 10 SKU02771, 15 SKU02772, and 12 SKU02773 from BTC Distribution. You received all the stocks ordered and paid 20% of the purchase price together with the freight of $209 incl. GST. You agreed to pay BTC Distribution the balance on 3 June. |
| 1 May | You paid $5,500 incl. GST for a three-month product liability insurance policy to CoverWallet. |
| 1 May | You received $16,280 incl. GST cash in advance from clients for a 6-month subscription to your company featured magazine, “Humpty Dumpty”. |
| 1 May | You received $13,200 incl. GST in advance from ThinkFun for repair of toys. |
| 2 May | You spent $748 incl. GST on miscellaneous office supplies at Officeworks. You paid for these from your bank account. Consider purchase of supplies as a prepaid asset account. |
| 2 May | You spent $41,800 incl. GST on a plastic welding machinery and paid for it by using your bank account. You estimate that the machinery will have a useful life of 5 years, during which you are planning to produce 16,500 units of new toys. The residual value of the machinery is $5,000. Actual number of units of toys that will be produced over the next 12 months will be 1,200 units. Note that the trial Company in Xero does not allow you to add an asset to the register or create asset types as we did in Demo Company in Week 6 so you’ll need to just record this transaction as an asset purchase. |
| 3 May | You sold 20 SKU02770 and 10 SKU02772 to Toy Fanatics. Toy Fanatics paid you the full amount into your bank account. |
Details of transactions for Week 1: 1 to 5 May 2020
Page 7 of 16
Week 2: 6 May to 12 May, 2020
| Date | Details |
| 6 May | You spent $3,113 incl. GST on a computer at Digi-Com and paid for it from your bank account. You estimate it will have a useful life of 3 years and be worth $354 at the end of the 3 years. Computer is depreciated using the diminishing balance method and the rate of depreciation is 50%. Record the purchase of the computer on this date. |
| 6 May | You transferred surplus cash out of the bank account to an investment account. You realised that you don’t need all your capital sitting in the low interest working bank account so have transferred $50,000 into a higher interest-bearing account. Record this movement in a journal entry. This account will pay you 2.5% interest per annum, credited monthly on the 6th of each month into your account. |
| 7 May | You sold 20 SKU02772 and 30 SKU02773 to FAO Schwarz on account, term 2/8, n/30. |
| 8 May | You purchased 25 SKU02774, 15 SKU02775, and 15 SKU02777 on credit from Ambassador Toys. |
| 9 May | You sold 18 SKU02774and 14 SKU02770 to Kidstuff Toys. Kidstuff paid you a deposit of 40% of the total sale into your bank account and agreed to pay the remaining 60% on 16 June. |
| 10 May | You sold 15 SKU02771 and 24 SKU02775 to Tiny Tiny Toys. Tiny Tiny paid you a deposit of 35% of the total sale into your bank account and agreed to pay the remaining 65% on 10 June. |
| 10 May | You received $474.76 credit (incl. GST) for damaged items including 4 SKU02770 and 4 SKU02773 returned to BTC Distribution. |
| 10 May | You sold 20 SKU02773 and 24 SKU02777 to Emond Toys. Emond Toys paid you a deposit of 30% of the total sale into your bank account and agreed to pay the remaining 70% on 27 May. |
| 10 May | You opened an account with Texaco Petrol to use the businesses debit card to pay for fuel for the delivery van. |
Details of transactions for Week 2: 6 to 12 May 2020
Page 8 of 16
Week 3: 13 May to 19 May, 2020
| Date | Details |
| 13 May | You sold 30 SKU02772, 30 SKU02775 and 15 SKU02777 to Sandy Toys. Sandy Toys paid you a deposit of 50% of the total sale into your bank account and agreed to pay the remaining 50% on 25 May. |
| 14 May | You received the full payment less discount from FAO Schwarz for their purchase on 7 May. |
| 15 May | You paid WPP Group $9735 incl. GST for online advertisements. These ads will run over the next 3 months, with an end date of 15 August 2020. |
| 16 May | You sold 15 SKU02775 and 15 SKU02777 to Ideal Toy Company. Ideal Toy Company paid you the full amount into your bank account. |
| 17 May | You sold 10 SKU02771 and 12 SKU02775 to Irwin Toys. Irwin Toys paid you a deposit of 70% of the total sale into your bank account and agreed to pay the remaining 30% on 22 May. |
| 17 May | You paid an invoice for a week’s fuel bill of $484 incl. GST from Texaco Petrol plus 1% transaction fee. Transaction fee includes GST. |
| 17 May | Paid Ambassador Toys in full for the purchase on 8 May. |
Details of transactions for Week 3: 13 to 19 May 2020
Page 9 of 16
Week 4: 20 May to 26 May, 2020
| Date | Details |
| 20 May | You sold 45 SKU02775 and 53 SKU02774 Diggi Toys on account, term 3/10, n/30. |
| 21 May | You sold 40 SKU02772 and 36 SKU02777 to Supercell Toys on account, term 2/10, n/30. |
| 22 May | You granted Supercell Toys $770.70 credit (incl. GST) for 6 SKU02777 returned. |
| 23 May | You sold 10 SKU02772 and 20 SKU02773 to Kid Brands. Kid Brands paid you the full amount into your bank account. |
| 24 May | You sold 11 SKU02771 and 14 SKU02775 to Plan B Toys. Plan B Toys paid you a deposit of 60% of the total sale into your bank account and agreed to pay the remaining 40% on 16 June. |
| 24 May | You paid an invoice for a week’s fuel bill of $484 incl. GST from Texaco Petrol plus 1% transaction fee. Transaction fee includes GST. |
Details of transactions for Week 4: 20 to 26 May 2020
Page 10 of 16
Week 5: 27 May to 29 May, 2020
| Date | Details |
| 27 May | You sold 15 SKU02772 and 20 SKU02775 to Funko Toys on account, term 3/6, n/30. |
| 27 May | You received the full payment less discount from Diggi Toys for their purchase on 20 May. |
| 28 May | You granted Funko Toys $444.25 credit Incl. GST for 5 SKU02775 returned. |
| 28 May | You sold 16 SKU02777 and 8 SKU02773 to Child World. Child World paid you the full amount into your bank account. |
| 28 May | You paid $1,408 cash to satisfy warranty claims on faulty toys. |
| 29 May | You sold 20 SKU02777 to Creative Playthings. Creative Playthings paid you the full amount into your bank account. |
| 29 May | You sold 12 SKU02774 and 14 SKU02775to Bruder Toys. Bruder Toys paid you a deposit of 70% of the total sale into your bank account and agreed to pay the remaining 30% on 8 June. |
| 29 May | You received the full payment from Supercell Toys for the sales on 21 May, less discount. |
| 29 May | You received the full payment from Funko Toys for the sales on 27 May, less discount. |
Details of transactions for Week 5: 27 to 29 May 2020
Page 11 of 16
Adjusting Journal Entries
31 May 2020
This is the final day of the calendar month, and your main task is to prepare the month end
accounting entries. For any adjustments required you will need to prepare a general journal
entry.
The adjusting journals that you will need to enter are as follows – round to TWO decimal
places:
1. Interest expense – short-term loan (Northern Bank) (0.5 marks)
2. Insurance expense – product liability insurance policy (CoverWallet). (0.25 marks)
3. First month of subscription revenue earned from the company featured magazine,
“Humpty Dumpty”. (0.25 marks)
4. You completed 30% of Toy repairs for ThinkFun Toys during May. (0.25 marks)
5. Office supplies on hand at 30th May is $341 incl. GST. (0.5 marks)
6. Depreciation expense – plastic welding machinery, using the units of production
method. (0.5 marks)
7. Depreciation expense – computer, using the diminishing balance method. (0.5 marks)
8. Interest earned at month end. (0.5 marks)
9. You are required to pay for an invoice for a week’s (27 May to 29 May) fuel bill of $484
incl. GST from Texaco Petrol. This is not yet paid yet. Record the relevant adjusting
entry. (0.5 marks)
10. Advertising expense amount for the month of May. (0.5 marks)
11. Provision for warranties is equal to 5% of sales. (0.5 marks)
12. Estimate of doubtful debts is 10% of Accounts Receivable as at 31 May. (0.5 marks)
13. Salaries expense accrued for May. (0.25 marks)
14. Warehouse rent expense accrued for May. (0.5 marks)
15. Depreciation expense Delivery Van, using the straight-line method. (0.25marks)
16. Depreciation expense Store Building, using the straight-line method. (0.25marks)
17. Interest expense accrued on the loan for Building of the Head Office. (0.25marks)
18. 40% of deliveries are performed during May. (0.25 marks)
19. Telecommunication accrued for May. (0.25 marks)
20. Insurance expense, Fire insurance. (0.25 marks)
Note all month end adjusting journals must be dated 31 May 2020.
Page 12 of 16
Assignment requirements (Please ensure all reports have correct
dates)
1. A Trial Balance report dated 30 May 2020. This is your ‘unadjusted’ Trial
Balance. Use the older version of the Trial Balance. (4.5 marks)
2. A Journal Report for 31 May 2020. An example from Demo Company is shown below.
(7.5 marks)
Please note that: you MUST change the date from 31 May 2020 to 31 May 2020 and
click onto “Show Posted Manual Journals Only”. Students who submit a Journal
report that includes all journals of the whole month of May 2020 may lose 50% of their
mark for this requirement.
3. A Profit and Loss report for the period 1 May 2020 to 31 May 2020. Use the older
version of the Profit and Loss. (0.5 marks)
4. A Balance Sheet report as at 31 May 2020. Use the older version of the Balance Sheet.
(0.5 marks)
5. A professionally presented short written business report (maximum 1,000 words)
designed for an internal user of the accounting information. Your written report is
required to be classified as below.
Page 13 of 16
Written Report – Financial performance factors (2 marks)
Your report explains the financial results and performance of your company in May 2020. You
are required to provide four (4) discussion factors to analyse the financial performance of the
company. These can be items taken from either balance sheet or profit and loss that you feel
had an impact on the financial performance of the company. To achieve full marks, you are
required to provide an appropriate XERO report (other than the ones provided before),
calculation and/or ratio to support your discussion of each factor you have chosen to
highlight.
Written report – Benchmarking (1 mark)
You are required to compare the company results with that of at least one competitor. You
require to use the annual reports of the competitor as your source for benchmarking purposes
and compare your company with the competitor using at least two (2) benchmarking ratios.
You can find the Toy and Game Retailing industry characteristics and performance here:
https://www.ato.gov.au/Business/Small-business-benchmarks/In-detail/Benchmarks-A-Z/R-Z/Toyand-game-retailing/
http://clients1.ibisworld.com.au/reports/au/industry/default.aspx?entid=418
You may also want to refer to other resources for the comparison/benchmarking purposes.
Written report – Recommendations (1 mark)
you are required to provide two recommendations for the business moving forward and
include supporting evidence through analysis to justify your recommendations. You are
required to be creative and think about both financial and non-financial factors e.g., you can
discuss media reports, current global financial climates, international demand, expansions or
contractions of departments/product lines, internal factors, risk and liability etc.
Written report – Visualisation (2 marks)
Provide four (4) graphs that visually illustrate the company’s overall financial situation and
performance. Include a description for each graph that describes the results or trends. You
are required to provide meaningful, effective, easy to read, and well-formatted graphs for use
in managerial decision making.
Page 14 of 16
Written report – Format (0.5 marks)
You are required to write your report according to the business report format. The following
link, taken from Business School of Victoria University of Wellington, New Zealand, should
assist you with writing a business report according to the business report format.
https://www.victoria.ac.nz/vbs/teaching/resources/VBS-Report-Writing-Guide-2017.pdf
Referencing (0.5 marks)
All submissions will be reviewed by a program called “Turnitin” and this will identify instances
of plagiarism (copying). This is a very serious offence and can result in you receiving no marks
for the assessment task.
Please ensure if you have copied information you use quotation marks and appropriate
referencing.
If you reword someone else’s work, you still need to refer to the author’s in your sentence.
For example, Hines (1991) discusses how……. – whilst this is not a quote you need to reference
the idea.
This assignment requires you to analyse data. The purpose of the assignment is to develop
your analytical skills which are not those of an investment advisor.
Late Submission Penalty
“The standard penalty for late submission of assessment tasks is 5% of the marks for that
task for each delay in submission of a day or partial day up to a maximum of five (5) working
days after the due date.”
Page 15 of 16
Assignment Instructions
Here I provide you with further information on how to approach this assignment.
1. Follow the below instructions to add the required accounts in your chart of accounts:
➢ In the Accounting menu, select Advanced, then click Chart of accounts.
➢ Click Add Account.
➢ Enter the components of each required account.
2. Follow the below instructions to add the new inventory items:
➢ In the Business menu, select Products and services.
➢ Click New Item.
➢ Complete the Item Code and Item Name fields.
➢ Select the I purchase this item checkbox and complete each of the fields you want to
set a default value for. Repeat this process with the I sell this item checkbox.
➢ Do NOT track inventory items at this stage.
3. Follow the below instructions to enter your conversion (opening) balances manually
through the trial balance:
➢ Click on the Accounting Tab.
➢ Click on Conversion balances
➢ Click on Conversion Date. Conversion Date is “May 2020”.
➢ Return to Trial balance and entre all the required figures into your opening Trial
Balance.
➢ When entering conversion balances in Xero, enter all balances as positive numbers,
whether they are debits or credits.
➢ Click on Save.
➢ The balances for accounts receivable and accounts payable need to be backed up
by the corresponding unpaid invoices and bills.
➢ Entre the unpaid invoices.
➢ Entre the unpaid bills.
4. Follow the below instructions to entre the opening inventories on hand at 1st of
May 2020.
➢ Click on products and services.
➢ Click on each inventory item.
➢ Click on Edit item.
➢ Tick the box for “I track this item” for each inventory item.
➢ Under products and services click on “Import”.
➢ Click on Opening Balances.
➢ Under “Update opening balances” choose 1 May 2020 as the date of your
opening balances.
➢ Download existing opening balances.
Page 16 of 16
➢ Complete the Excel template and record the opening balances within the Excel
template.
➢ Upload the updated template.
➢ Click on Continue.
5. Please make sure that you save your conversion (i.e. opening) balance beforeentering
May transactions.
6. You can now continue with the assignment and record the required transactions. If you
require any further help, please refer to the XERO help-sheets provided on weeklybasis.
The post ACC1AIS – Individual Assignment appeared first on My Assignment Online.