accounting in organisation
Microsoft Word - ASSIGNMENT Q-1.docx Title: ACCY112: Accounting in Organisations Type of assessment task: Assignment 1 Due date: Week 6 submit online the latest 23 April 14:00. QUESTION 1 On 31 November 2019, Albion Store received its bank statement from Western bank and had the following data to prepare its bank reconciliation for November 2019. (a) Albion Store Cash at Bank account balance at 1 November 2019 was $8,250, Debit. The progressive totals of the Cash Receipts Journal and the Cash Payments Journal, before considering items (b) to (i) below, were $25,478 and $14,548 respectively. (b) The bank statement includes a $410.00 deduction for a cheque drawn by Albion Supplies. Albion Store notified the bank of this bank error. (c) Cheques written during November 2019 that had not been presented for payment were: Cheque No. Amount 616 $475.00 806 240.00 810 425.00 (d) The bank statement lists a $470 deposit for a collection on account receivable by EFT from Jonas Ltd. (e) The balance of bank statement includes $90 for interest income earned by Albion Store during November 2019. (f) The bank statement lists a $35 subtraction for the bank service charge. (g) On 31 November 2019, the company deposited $360, but this deposit does not appear on the bank statement. (h) The bank statement includes a debit of $242 that relates to a cheque received from Business Club on 21 November 2019. The cheque was returned due to “Unauthorised Signature”. (i) Cheque No.817, written for advertising expense of $769.10, was recorded as $796.10 in company’s cash payment journal. (j) The 31 November 2019 balance shown on the bank statement was $19,860 Credit. Required: a) Prepare the bank reconciliation for Albion Store at 31 November 2019, ignore GST (45 marks) b) Prepare journal entries in general journal form to record the adjustment for the book of Albion Store. (25 marks) QUESTION 2 Chicko Ltd analysed its accounts receivable balances at 31 December 2019 and arrived at the aged balances listed below, along with the percentages of each age group that have proved uncollectable in the past: Age Estimated uncollectable (%) Balance $ Current 1 70,000 30‐60 days past due 2 25,000 61‐120 days past due 8 8,000 121 days‐6 months past due 15 5,000 Over 6 months past due 30 4,000 127,000 The firm handles credit losses using allowance method. The accounting record of the company indicated that it has total sales of 222,500 in which 20% were cash sales. The Sales return & allowances this year is $28,000 all are credit sales. In addition, the Allowance for Doubtful Debts account has debit balance amounting to $810 on 31 December 2019, before making any adjustments. Required (show all working and ignore GST and narration): (a) Calculate the amount of Allowance for Doubtful Debts to be available at 31 December 2019 using Accounts Receivable Ageing method. (10 marks) (b) Prepare the adjusting entry for estimated bad debts on 31 December 2019 using Accounts Receivable Ageing method. (5 marks) (c) If the company uses 3% from its Net Credit Sales to estimate the allowance for bad debts, prepare the adjusting entry for estimated bad debts on 31 December 2019, and how much the amount of Allowance for Doubtful Debts account balance at 31 December 2019. (10 marks) (d) Cassie Ltd is one of the customers that have been declared to be uncollectible; therefore it needs to be written off. Show the journal entry to write off Cassie’s account in January 2019. The amount Cassie owed was $1,250. (5 marks)