Team Assignment Cover Sheet

FAMILY NAME FIRST NAME

STUDENT ID. NUMBER

(PRINT CLEARLY)

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UNIT NAME

UNIT CODE

DUE DATE

TUTORIAL DAY & TIME

NAME OF TUTOR

TITLE/TOPIC OF ASSIGNMENT

NAME OF LECTURER

Late assignments submitted outside office hours will be receipted at 8.30 a.m. the following working day.

CAPE COD BOATS & YACHTS PTY LTD

– ACCOUNTING PRACTICE SET

[PROBLEM]

Leo Langa, 2023 Accounting & Finance UWA Business School

The University of Western Australia Perth WA 6009

Table of Contents

INTRODUCTION 6

Company Background 6

Accounting System Information 6

UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS 7

As at 31 May 2023 7

SUBSIDIARY LEDGERS 8

Schedule of Accounts Receivable 8

As at 31 May 2023 8

Schedule of Accounts Payable 8

As at 31 May 2023 8

TRANSACTIONS 9

For June 2023 9

Instructions 10

ADJUSTING ENTRIES 11

Cash Receipts Journal 15

Cash Payments Journal 16

Sales Journal 18

Purchases Journal 19

LEDGERS 20

Accounts Receivable Subsidiary Ledger 20

Accounts Payable Subsidiary Ledger 21

General Ledger 22

WORKSHEET 31

FINANCIAL STATEMENTS 33

Schedules of Subsidiary Ledgers 33

Income Statement 34

Statement of Changes in Equity 36

Balance Sheet 37

Post-closing Trial Balance 38

WRITTEN COMPONENT 39

STUDENT DECLARATION FOR COMPLETION OF WORK 42

INTRODUCTION

The objective of this Accounting practice set is to provide students with an insight into the process of recording transactions, completing adjusting and closing entries, and preparing financial statements for a retail business.

Company Background

Cape Cod Boats & Yachts Pty Ltd has been in business in Ocean Grove, Victoria since July, 2017. The company was started by Clint Hodgson and operates a large showroom/warehouse which sells boating and yachting equipment & accessories from all over Australia on a wholesale basis to other business outlets on both credit and cash terms. The company's Share Capital consists of 2,268,000 Ordinary Shares, originally issued at

$2 each and which are owned by various members of the Hodgson Family. The company has employed a

combination of sales and administration staff to run the business since July, 2017. The company has generally been profitable since it was originally formed and has reasonable liquidity and solvency. Management has run the company efficiently over the past six years since formation.

Accounting System Information & Procedures

The company has a financial year end of 30 June and prepares adjusting entries at the end of the financial year.

To ensure efficiency of its accounting procedures, the company uses the following Special Journals to maintain its accounting records:

1. Sales Journal (SJ): to record all sales of Inventory on credit

2. Purchases Journal (PJ): to record all Purchases of Inventory on credit

3. Cash Receipts Journal (CRJ): to record all Cash Receipts

4. Cash Payments Journal (CPJ): to record all Cash Payments

5. General Journal (GJ): to record all transactions other than the above.

Business transactions are recorded for Cape Cod Boats & Yachts Pty Ltd on a daily basis in one of these five journals in the accounts.

Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted immediately to the relevant ledger account if they are entered into the general journal, the “other” column of the Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the end of the month and then posted to the appropriate accounts. The company uses a periodic inventory system.

In practice, the company would be required to collect and pay Goods and Services Tax (GST) on its sales and purchases. However, for the purposes of this exercise, GST has been excluded.

Please Note: All amounts in this practice set can be rounded off to the nearest dollar.

UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS

As at 31 May 2023

Acc.

Account

Debit ($)

Credit ($)

100

Cash at Bank

2,458,512

101

Accounts Receivable Control

952,560

102

Office Supplies

604,044

103

Inventory

3,124,800

104

Prepaid Rent (paid 1 March 2023)

2,958,480

105

Prepaid Insurance (paid 1 Nov. 2022)

45,360

150

Showroom Fittings

2,041,200

151

Accumulated Depreciation – Showroom Fittings

160

Machinery

693,000

161

Accumulated Depreciation - Machinery

340,200

200

Accounts Payable Control

614,376

201

Interest Payable

202

Utilities Payable

203

Wages Payable

204

Salaries Payable

205

Tax Payable

206

Dividend Payable

250

Mortgage Loan (due 31 July 2038)

2,427,768

300

Share Capital

4,536,000

301

Retained Profits (1 July 2022)

3,854,088

302

Dividends Declared

303

Profit and Loss Summary

400

Sales Revenue

16,182,936

401

Sales Discounts (Discount Allowed)

124,236

402

Sales Returns and Allowances

35,028

500

Purchases

7,707,420

501

Purchase Discounts (Discount Received)

96,768

502

Purchase Returns and Allowances

40,572

600

Freight-Outwards

11,592

601

Wages Expense - Sales Staff

3,872,484

602

Depreciation Expense – Showroom Fittings

603

Depreciation Expense - Machinery

604

Office Expense

605

Rent Expense

606

Insurance Expense

607

Advertising Expense

175,392

608

Interest Expense

609

Utilities expense

233,856

610

Tax Expense

611

Sundry Expenses

12,096

612

Salaries Expense – Office Staff

3,042,648

613

Bad Debts Expense

28,092,708

28,092,708

SUBSIDIARY LEDGERS

Schedule of Accounts Receivable

As at 31 May 2023

Note: Cape Cod Boats & Yachts Pty Ltd offers all customers Credit Terms 2/10, n/30, unless otherwise stated

Acc. No.

Account

Invoice date

Amount ($)

101-1

Anglesea Anchors & Rudders

31 May

381,024

101-2

Barwon Bows & Hulls

21 May

192,528

101-3

Colac Cabins & Keels

29 April

260,568

101-4

Drysdale Decks & Masts

15 May

118,440

952,560

Schedule of Accounts Payable

As at 31 May 2023

Acc. No.

Account

Invoice date

Credit terms

Amount ($)

200-1

Portarlington Boating Equipment

31 May

2/10, n/90

173,880

200-2

Torquay Yachting Accessories

28 May

1/10, n/45

440,496

614,376

TRANSACTIONS

For June 2022

Date

Transaction

Week 1

June 1

Anglesea Anchors & Rudders paid the balance of its account and were given a discount of $7,616 by us.

Delivered goods to Barwon Bows & Hulls for $273,168 and issued invoice #553. Issued cheque #130 to pay $30,240 for delivery freight costs of inventory to their premises.

June 4

Paid the amount owing to Portarlington Boating Equipment and Cheque #131 was sent to the Creditor.

June 7

Total Cash Sales for the week were $77,112.

Week 2

June 9

Colac Cabins & Keels paid $109,368 toward the amount it owes us.

June 10

Made a purchase from Torquay Yachting Accessories for $234,360 for inventory: Terms are 1/10, n/45 and date of invoice was 10 June.

The firm issued cheque #132 for the purchase of Office Supplies amounting to $22,176

June 11

Anglesea Anchors & Rudders purchased inventory of $275,184. Invoice #554 was issued.

June 12

Some of the Yacht equipment purchased on 10 June from Torquay Yachting Accessories were the incorrect size and design. We returned the inventory in exchange for a Credit Note of $75,600.

June 14

Total Cash Sales for the week were $105,336.

Week 3

June 15

Paid office staff salaries of $293,832. Cheque #133 was issued for payment. Cheque #134 was issued to pay sales staff wages, $249,480.

June 16

Purchased inventory from Portarlington Boating Equipment for $385,560. The invoice was dated 16 June. Credit terms are 2/10, n/90.

June 17

Sold inventory to Colac Cabins & Keels for $497,448 on invoice #555. Issued cheque #135 to pay for delivery freight costs of $37,800.

June 19

The company issued cheque #136 to pay the amount still owing to Torquay Yachting Accessories