Posted: September 10th, 2021

ACC106 Task 2 Assignment Business Scenario and Instructions

ACC106 Task 2 Assignment
Business Scenario and Instructions
1 Floss’s Floristry – Business Background
1.1 Introduction
At 1st June 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online, Florence G established a new proprietorship, Floss’s Floristry. Floss’s
Floristry is a GST-registered floristry business that sells flowers to the general public.
As well, the business provides indoor plant maintenance and decoration services to
corporate offices and sells a small range of decorative items. The business sources its
stock from a number of suppliers.
The business currently sells two types of vase: the Ming Vase and the Ottoman Vase,
and an Ebony Ornament.
Florence G, sole proprietor, has quickly established a reputable and growing business
and has employed two staff members. Being an astute businessperson, Florence is
using Microsoft EXCEL software to maintain the accounting records of the business
transactions during the month of June 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online, which is the last month of the Australian
financial year.
ACC106 Task 2 Assignment S2 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online
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1.2 Accounting Policies
1.2.1 Floss’s Floristry uses accrual accounting for recording transactions and
adjustments.
1.2.2 Floss’s Floristry uses a perpetual inventory system with weighted average.
1.2.3 Floss’s Floristry prepares quarterly Business Activity Statements (BAS) and remits
the net GST liability due to the ATO in the month following the end of each quarter.
(Note: as this is a new business, Florence has not yet prepared a BAS and has no
liability at the start of June.)
1.2.4 Floss’s Floristry has the following depreciation policies:
• Display Cabinet: depreciated over 10 years using reducing balance method at
rate of 20% ($2 200 residual value)
• Refrigeration Unit: depreciated over 4 years using straight line method (no
residual value)
• Motor vehicles: depreciated using reducing balance method at the rate of 17%
over 8 years ($6 000 residual value)
1.2.5 Floss’s Floristry pays employee wages on a weekly basis. Wages are paid on the
Thursday for the previous week. The sales assistant is full time and earns a weekly
wage and works Tuesday to Saturday. The plant maintenance specialist is employed on
a casual basis and is paid hourly. All employees are paid employer superannuation
contribution to their nominated superannuation funds at the rate of 9.5% of gross
salary (before deductions). The employees are being paid into the same
superannuation fund through an online portal (this means you can account for all
superannuation together).
1.2.6 Floss’s Floristry records an allowance for doubtful debts that equates to 9% of
Accounts Receivable balance at the end of the year.
1.2.7 Floss’s Floristry records all prepaid expenses as assets (prepayments), and then
expenses the portion used as end of year adjustments.
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2 Accounting System
2.1 Journal and Ledgers
Floss’s Floristry uses the following journals and ledgers:
Cash Receipts Journal – to record all cash receipts of the business including cash
sales and cash received from debtors
Cash Payments Journal – to record all cash payments of the business including cash
purchases, cash payments to creditors
Sales Journal – to record all credit sales of Inventory
Purchases Journal – to record all credit purchases of Inventory & other items
General Journal – to record all other transactions not recorded in other
journals (eg adjusting entries & closing entries)
General Ledger – separate ledger accounts are maintained for each asset,
liability, equity, revenue and expense account
Subsidiary Ledgers – maintained for accounts receivable and accounts payable,
and for inventory, then reconciled against relevant general
ledger accounts
2.2 The business prepares the following Financial Statements:
Balance Sheet – Assets, Liabilities, Owners’ Equity
Income Statement – Revenue, Expenses, Gross/Net profit or loss
Statement of Changes in Equity – Capital, Drawings
ACC106 Task 2 Assignment S2 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online
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2.3 Chart of Accounts
Floss’s Floristry Chart of Accounts is shown below.
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2.4 Employee Payroll
The Schedule of Employees and their pay rates are shown below along with relevant
deductions (eg private health and employer superannuation guarantee).
Staff ID Staff Name Position Private
Health
ESG Weekly
salary
Hourly
rate
001AAA Sturt Pea Sales Assistant $16/wk 9.5% $830
001BBB T Rose Plant Specialist $0 9.5% $31
Calendar of relevant months for calculating payroll:
Jun-18
Mon Tues Wed Thurs Fri Sat Sun
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30
Jul-18
Mon Tues Wed Thurs Fri Sat Sun
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31
Assume all employees claim the Tax-free threshold and use the calculator included in
the EXCEL Student Templates file (Payroll calculator sheet) to calculate the withholding
tax. Note: employees began work in the second week of June (5 June).
This can also be found on the ATO site: https://www.ato.gov.au/Rates/Weekly-taxtable/
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3 Business Transactions for June 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online
ACC106 Task 2 Assignment S2 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online
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4 Adjustments for end of financial year 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online
4.1 The stocktake on 30 June revealed $668 worth of supplies on hand.
4.2 The next wages payment will occur on Thursday 5 July for the employee earnings in the final
week of June. T Rose worked for 11 hours between 26th and 30th June; Sturt Pea worked a usual
week.
4.3 Calculate the amounts for depreciation expense for each of the three types of non-current
Assets: display cabinet; refrigeration unit; vehicles (Estimate expense as though assets held for
whole of month of June.)
4.4 Calculate and record the adjusting entry for internet for the end of the month given that
June internet paid in advance has been used up.
4.5 Calculate and record the adjusting entry for rent for the end of the month given that June
rent paid in advance has been used up.
4.6 During the last week of June, Floss’s Floristry earned one third of the advance payment for
the Big 4 Accountants work.
4.7 Calculate the Allowance for Doubtful Debts based on 9% of accounts receivable at the end
of the year and make the necessary adjusting entry.
5 Accounting Requirements and Instructions
5.1 Spreadsheet software
The file on the course Blackboard site (ACC106 Task 2 Student Templates) contains a series
of worksheets that you should use to complete the requirements below. Make changes as
required including formulas and links.
5.2 Completing the Accounting Cycle
5.2.1 Record all the business transactions from section 3 above in the relevant special
journals and post the Account totals to the relevant ledgers using EXCEL linking function.
Use the accounts listed in the Chart of Accounts and enter names of the ledger accounts
as required. In the ledgers, use formulas to create running totals. DO NOT POST
ADJUSTMENTS yet.
5.2.2 Prepare an ‘Unadjusted’ Trial Balance as at 30 June 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online by linking balances in the
ledger accounts to the Trial Balance. It will be a ‘Live’ Trial Balance but at this point it is
unadjusted as the Adjustments have not yet been posted. When completed, check the
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debit and credit columns are equal in the Trial Balance. Then copy and special paste (as
values only) the Trial Balance into the Worksheet columns ‘Unadj Trial Balance’. These
should not change now as they are raw figures. (Tip: Use Paste Special to paste in as
values.)
5.2.3 Record the end of year Adjustments, listed above at section 4, in the Worksheet
and complete the Worksheet by calculating balances in the Adjusted Trial Balance
columns. Then complete the Income Statement and Balance Sheet columns in the
Worksheet.
5.2.4 Record the Adjustments in the General Journal and post these adjustments to the
General Ledger using new accounts as necessary. (This will change the figures in your
Trial Balance which should now match the Adjusted Trial Balance figures in the
Worksheet.)
5.2.5 Prepare the closing entries in the General Journal, and post these to the General
Ledger. (As with adjustments, this will change your Trial Balance figures if you have
linked correctly. NOW, your Adjusted Trial Balance figures in the Worksheet will NOT
match the Trial Balance figures for the Revenue and Expense accounts and totals.)
Remember: for closing, close revenue and expense accounts to the Income Summary
Account, then close Income Summary Account to the Capital account and finally, close
drawings to the Capital account.
5.2.6 Finally, prepare the Financial Statements for 30 June 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online by copying or linking the
appropriate figures into your Financial Statements. Refer to your textbook or course
Learning Materials for guidance on the format of these Statements. For Balance Sheet,
use the Classified Balance Sheet in report form as demonstrated on p.184 of the text;
and Income Statement and Statement of Changes in Equity as demonstrated on p.240 of
the text. (Note, for the Income Statement, there will be three revenue streams including
discount received.)
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6 Additional Information
6.1 Number formats
All amounts should be rounded/truncated to two decimal places. Amounts can be displayed
without $ sign. (Use $ sign for Financial Statements only).
6.2 Journals and Ledgers
Adjustment & closing entries should be posted from the General Journal to the respective
General Ledger accounts at the end of the financial year (June 30)
Total columns in the special journals should be posted to the respective General Ledger
accounts at June 30.
Note: In the special journals, all entries that do not belong in one of the account columns as
listed in the template, should be included in the “Other Accounts” columns. These should
then be posted on an individual basis to the respective ledger accounts. (Hint: the journal
templates contain all the account columns as required for this business. However, not all
accounts have been included in the general ledger template – please add as required.)
Remember: When special journals are used, do NOT also use the General Journal for the
same transaction. Also, the subledgers for inventory, AR and AP are not linked to the General
ledger but the balances should be checked.
6.3 Inventory
Record Inventory purchases and sales in the Subsidiary Ledger Inventory AS THEY OCCUR. As
well, record purchases and sales of inventory in the relevant journals (using figures in the
Inventory record) and post the Inventory totals from these journals to the General Ledger
Inventory account at June 30.
6.4 Wages
There are two payroll worksheets that can be used to calculate wages. The payroll calculator
from the ATO should be used to estimate weekly PAYG withholding tax for each employee.
Use the table in the payroll template to calculate relevant amounts for each employee each
week.
6.5 Depreciation
There is a depreciation worksheet with a table that can be used to calculate depreciation for
the non-current assets. (Tip: depreciation expense is based on the net cost of the asset.)

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