ACCT1101 Edward's Electrical Goods has been in business in Sydney since July, 2011.

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EDWARD'S ELECTRICAL GOODS PTY LTD

– ACCOUNTING PRACTICE SET

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Table of Contents

INTRODUCTION 5 CompanyBackground 5 AccountingSystemInformation 5 UNADJUSTED TRIAL BALANCE AND CHARTOFACCOUNTS 6 As at 31May2017 6 SUBSIDIARYLEDGERS 7 Schedule ofAccountsReceivable 7 As at 31May2017 7 Schedule ofAccountsPayable 7 As at 31May2017 7 TRANSACTIONS 8 ForJune2017 8 Instructions 9 ADJUSTINGENTRIES 10 CashReceiptsJournal 18 CashPaymentsJournal 19 SalesJournal 20 PurchasesJournal 21 LEDGERS 22 Accounts ReceivableSubsidiaryLedger 23 Accounts PayableSubsidiaryLedger 24 GeneralLedger 25 WORKSHEET 34 FINANCIAL STATEMENTS 36 Schedules ofSubsidiaryLedgers 36 IncomeStatement 37 Statement of ChangesinEquity 38 BalanceSheet 39 Post-closingTrialBalance 40 WRITTENCOMPONENT 41 STUDENT DECLARATION FOR COMPLETIONOFWORK 46

INTRODUCTION

TheobjectiveofthisAccountingpracticesetistoprovidestudentswithaninsightintotheprocessof recordingtransactions,completingadjustingandclosingentries,andpreparingfinancialstatements foraretailbusiness.

Company Background

Edward's Electrical Goods has been in business in Sydney since July, 2011. The company was started by Edward Wright and operates a shop which sells electrical equipment on a retail basis to other businesses on credit and the public on cash terms. The company's share capital consists of 126,000 ordinary shares, issued at $1 each, that are owned by various members of the Wright family. The company employs a combination of sales and administration staff to operate the business.

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 oncredit

2. PurchasesJournal(PJ):torecordallpurchasesofinventoryoncredit

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

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

5. GeneralJournal(GJ):torecordalltransactionsotherthantheabove.

Business transactions are recorded for Edward's Electrical Goods 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 inventorysystem.

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 should be rounded to the nearest dollar.

UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS

As at 31 May 2017

Acc. No.	Account	Debit ($)	Credit ($)
100	Cash at Bank	68,292
101	Accounts Receivable Control	26,460
102	Store Supplies	16,779
103	Inventory	86,800
104	Prepaid Store Rent (paid 1 March 2017)	82,180
105	Prepaid Insurance (paid 1 Nov. 2016)	1,260
150	Store Shelving & Fittings	56,700
151	Accum. Depreciation – Shelving & Fittings
160	Equipment	19,250
161	Accumulated Depreciation - Equipment		9,450
200	Accounts Payable Control		17,066
201	Interest Payable
202	Utilities Payable
203	Wages Payable
204	Salaries Payable
205	Tax Payable
206	Dividend Payable
250	Bank Loan (due 1 June 2022)		67,438
300	Share Capital		126,000
301	Retained Profits (1 July 2016)		107,058
302	Dividends Declared
303	Profit and Loss Summary
400	Sales Revenue		449,526
401	Sales Discounts (Discount Allowed)	3,451
402	Sales Returns and Allowances	973
500	Purchases	214,095
501	Purchase Discounts (Discount Received)		2,688
502	Purchase Returns and Allowances		1,127
600	Freight-Out	322
601	Wages Expense - Sales Staff	107,569
602	Depreciation Expense- Shelving & Fittings
603	Depreciation Expense - Equipment
604	Supplies Expense
605	Rent Expense
606	Insurance Expense
607	Advertising Expense	4,872
608	Interest Expense
609	Utilities expense	6,496
610	Tax Expense
611	Sundry Expense	336
612	Salaries Expense– Office Staff	84,518
613	Bad Debts Expense

		780,353	780,353

SUBSIDIARY LEDGERS

Schedule of Accounts Receivable

As at 31 May 2017

Note: Edward's Electrical Shop offers all customers Credit Terms 2/10, n/30, unless otherwise stated

Acc. No.	Account	Invoice date	Amount ($)
101-1	Bellevue Hill Electrics	26 May	10,584
101-2	Glebe Lighting	15 May	5,348
101-3	Longueville Electrics	22 April	7,238
101-4	Vaucluse Lighting	10 May	3,290



			$26,460

Schedule of Accounts Payable

As at 31 May 2017

Acc. No.	Account	Invoice date	Credit terms	Amount ($)
200-1	Parramatta Electrical Engineering	28 May	2/10, n/60	4,830
200-2	Wentworth Lights Manufacturer	21 May	1/10, n/45	12,236



				$17,066

TRANSACTIONS

For June 2017

Date	Transaction
WEEK 1
June 1	Bellevue Hill Electrics paid the entire balance of its account that was still outstanding.
	Delivered goods to Glebe Lighting for $7,588 and issued invoice #401. Issued cheque #127 to pay $840 for delivery costs of inventory to their premises.

June 2	Paid the amount owing to Parramatta Electrical Engineering. Cheque #128 was sent.

June 3	Total Cash Sales for the week were $2142.

WEEK 2

June 6	Longueville Electrics paid $3038 toward the amount it owes us.

June 7	Made a purchase from Wentworth Light Manufacturers for $6510 for boutique lighting: Terms are 1/10, n/45 and date of invoice was 7 June.

	The firm issued cheque #129 for the purchase of store supplies amounting to $616.

June 8	Bellevue Hill Electrics purchased inventory of $7,644. Invoice #402 was issued.

June 9	Some of the boutique light fittings purchased on 7 June from Wentworth Light Manufacturers were the wrong design. Returned inventory in exchange for a Credit Note of $2,100.

June 10	Total Cash Sales for the week were $2,926.

WEEK 3

June 13	Purchased inventory from Parramatta Electrical Engineering for $10,710. The invoice was dated 13 June. Credit terms are 2/10, n/30.

June 14	Sold inventory to Longueville Electrics for $13,818 on invoice #403. Issued cheque #130 to pay for delivery costs of $1,050.

June 15	Paid office staff salaries of $8,162. Cheque #131 was issued for payment.
	Cheque #132 was issued to pay sales staff wages, $6,930.

June 16	The company issued cheque #133 to pay the amount still owing to Wentworth Light Manufacturers.

June 17	Total Cash Sales for the week were $2,779.


WEEK 4

June 20	Longueville Electrics returned $2,618 of inventory purchased on 14 June. Issued a Credit Note for the transaction.

June 21	Issued cheque #134 for $1,400 to pay for the annual gift the company donates to the Royal Children's Hospital Appeal. The gift is to be recorded as a sundry expense in the accounts.

June 22	Purchased inventory from Wentworth Light Manufacturers, worth $10,430. The terms were 1/10, n/45. Date of the invoice was 21 June.

June 23	Received the total amount owing from Longueville Electrics.

June 24	Total Cash Sales for the week were $4,368.

WEEK 5

June 27	Glebe Lighting paid the entre balance of its account that was still outstanding

June 28	Paid $8,400 of the amount owing to Wentworth Light Manufacturers and Cheque #135 was issued.

June 29	A dividend of $19,600 was declared to the company shareholders. However, the dividend will not be paid until November 9, 2017.
	Paid sales staff wages, $6,930 and Cheque #136 was issued to meet the payment.

June 30	Issued additional shares to the owners of the Company for cash, and $14,000 was received and banked.
	Total Cash Sales for the week were $2,604.

INSTRUCTIONS

1) Enter the transactions on pages 8-9 into the appropriate Journal for the month of June 2017, Remember to post Journal transactions to the ledger accounts as specified in the “Account System Information” section of theintroduction.

2) TotalallSpecialJournalcolumnsandposttotheappropriateledgeraccountattheendof themonth.

3) PreparetheunadjustedTrialBalanceasat30Juneontheworksheetprovided.

4) Prepare the adjusting entries shown on page 10 in the General Journal and post to the relevantledgeraccounts.Theentertheadjustmentsintherelevantworksheetcolumnsand prepare an adjusted TrialBalance.

5) Astocktakeon30June2017indicatesthatthebalanceofclosinginventoryis$157,388.Use this information to complete the remaining columns of theworksheet.

6) Use the worksheet to prepare the Income Statement and BalanceSheet.

7) CompletetheScheduleofAccountsReceivableandScheduleofAccountsPayable.Ensure the balances agree with the totals in the controlaccounts.

8) Prepareclosingentriesandposttotherelevantgeneralledgeraccounts.

9) Complete the post-closing Trial Balance as at June2017.

ADJUSTING ENTRIES

a) The computer equipment has a useful life of 10 years and estimated salvage value of$350.

b) The new Store Shelving & Fittings were installed on 1 July, 2015. They have a useful life of 9 years and no salvage value.

c) Twelve months of store rent was prepaid on 1 March,2017.

d) Acountofstoresuppliesindicatesthat$9,485remainonhandatyearend.

e) Aone-yearinsurancepolicywaspurchasedon1November2016for$1,260.

f) InterestontheANZBankLoanischargedat7%perannumandispaidannuallyon1August (theinterestexpenseshouldberoundedofftothenearestdollar).

g) ThecompanyhasbeeninformedthatVaucluseLightinghasbeendeclaredbankruptand Edward'sElectricalGoodshasagreedtowriteoftheamountowingasabaddebt.The companyusesthedirectwrite-ofmethodtoaccountforanybaddebtsinthebooks.

h) Atelephonebillfor$714forJunewasreceivedon4July.Theamounthasnotyetbeen recorded. The company records them as a utilitiesexpense.

i) Office Staff are paid once permonth,$8,162. The Office Staff were last paid on the 15June, 2017.

j) Sales staff are paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June, 2017.

k) The estimated Tax Payable for the year ended 30 June, 2017 is $19,600. This amount is to be paid on 30 September,2017.

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GENERAL JOURNAL
Date	Account	Post. Ref.	Debit	Credit

GENERAL JOURNAL
Date	Account	Post. Ref.	Debit	Credit

GENERAL JOURNAL
Date	Account	Post. Ref.	Debit	Credit

GENERAL JOURNAL
Date	Account	Post. Ref.	Debit	Credit

CASH RECEIPTS JOURNAL

Date	Account	Post. Ref.	Cash at Bank (100) DR	Sales Discounts (401) DR	Sales (400) CR	Accounts Receivable (101) CR	Other CR










	TOTAL

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CASH PAYMENTS JOURNAL

Date	Account	Chq. No.	Post Ref.	Other DR	Accounts Payable (200) DR	Purchases (500) DR	Cash at Bank (100) CR	Purchase Discounts (501) CR











	TOTAL

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SALES JOURNAL

Date	Invoice No.	Account	Post Ref.	Amount



















	TOTAL

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PURCHASES JOURNAL

Date	Invoice Date	Account	Terms	Post Ref.	Amount




















	TOTAL

LEDGERS

Accounts Receivable Subsidiary Ledger

BELLEVUEHILLELECTRICS 101-1

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				10,584
Jun-01	Receipt	GL1		10,584	-
Jun-08	Sold goods	GL9	7,644		7,644

GLEBELIGHTING 101-2

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				5,348
Jun-01	Delivered goods (Invoice # 401)	GL2	7,588		12,936
Jun-27	Receipts	GL23		12,936	-

LONGUEVILLEELECTRICS 101-3

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				7,238
Jun-06	Receipts	GL6		3,038	4,200
Jun-14	Sold goods	GL13	13,818		18,018
Jun-20	Sales returns	GL19		2,618	15,400
Jun-23	Receipts	GL21		15,400	-

VAUCLUSELIGHTING 101-4

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				3,290
Jun-30	Write off - Bad debt	GL36		3,290	-

Accounts Payable Subsidiary Ledger

PARRAMATTAELECTRICALENGINEERING 200-1

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				4,830
Jun-02	Payment	GL4	4,830		-
Jun-13	Purchases	GL12		10,710	10,710

WENTWORTHLIGHTMANUFACTURERS 200-2

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				12,236
Jun-07	Inventory purchased	GL7		6,510	18,746
Jun-09	Purchase return	GL10	2,100		16,646
Jun-16	Payment	GL17	16,646		-
Jun-22	Inventory purchased	GL20		10,430	10,430
Jun-28	Payment	GL24	8,400		2,030

General Ledger

CashatBank 100

Date	Explanation	Post.Ref.	Debit	Credit	Balance
31-May	Balance				68,292
Jun-01	Received from Bellevue Hill Electrics	GL1	10,372		78,664
Jun-01	Delivery costs - Glebe lighting	GL3		840	77,824
Jun-02	Payment to Parramatta Electrical	GL4		4,733	73,091
Jun-03	Cash sales	GL5	2,142		75,233
Jun-06	Longueville Electrics	GL6	3,038		78,271
Jun-07	Store supplies	GL8		616	77,655
Jun-10	Cash sales	GL11	2,926		80,581
Jun-14	Delivery costs - Longueville Electrics	GL14		1,050	79,531
Jun-15	Office staff salaries	GL15		8,162	71,369
Jun-15	Sales staff wages	GL16		6,930	64,439
Jun-16	Wentworth Lights Manufacturer	GL17		16,602	47,837
Jun-17	Cash sales	GL18	2,779		50,616
Jun-21	Gift: Royal children hospital appeal	GL19		1,400	49,216
Jun-23	Received from Longueville Electrics	GL21	15,176		64,392
Jun-24	Cash sales	GL22	4,368		68,760
Jun-27	Glebe Lighting	GL23	12,936		81,696
Jun-28	Wentworth Lights Manufacturer	GL24		8,316	73,380
Jun-29	Sales staff wages	GL26		6,930	66,450
Jun-30	Share issue proceeds	GL27	14,000		80,450
Jun-30	Cash sales	GL28	2,604		83,054

Accounts Receivable

Control 101

Date

Explanation

Post.Ref.

Debit

Credit

Balance

Store

Supplies 102

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Inventory 103

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Prepaid Store

Rent 104

Date

Explanation

Post.Ref.

Debit

Credit

Balance

Prepaid

Insurance 105

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Store Shelving&Fittings 150

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Accumulated Depreciation –

Store Shelving&Fittings 151

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Equipment 160

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Accumulated Depreciation -

Equipment 161

Date	Explanation	Post.Ref.	Debit	Credit	Balance

AccountsPayable Control 200

Date	Explanation	Post.Ref.	Debit	Credit	Balance

InterestPayable 201

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Utilities Payable 202

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Wages Payable 203

Date	Explanation	Post.Ref.	Debit	Credit	Balance

SalariesPayable 204

Date	Explanation	Post.Ref.	Debit	Credit	Balance

TaxPayable 205

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Dividend

Payable 206

Date	Explanation	Post.Ref.	Debit	Credit	Balance

BankLoan 250

Date	Explanation	Post.Ref.	Debit	Credit	Balance

ShareCapital 300

Date	Explanation	Post.Ref.	Debit	Credit	Balance

RetainedProfits 301

Date	Explanation	Post.Ref.	Debit	Credit	Balance

DividendsDeclared 302

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Profit &LossSummary 303

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Sales Revenue 400

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Sales Discounts 401

Date

Explanation

Post.Ref.

Debit

Credit

Balance

Sales Returns&Allowances 402

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Purchases 500

Date	Explanation	Post.Ref.	Debit	Credit	Balance

PurchaseDiscounts 501

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Purchase Returns &

Allowances 502

Date	Explanation	Post.Ref.	Debit	Credit	Balance

Freight-Out 600

Date

Explanation

Post.Ref.

Debit

Credit

Balance

Wages Expense –SalesStaff 601

Date	Explanation	Post.Ref.	Debit	Credit	Balance

WORKSHEET – 30 JUNE 2017


	Unadjusted Trial Bal.	Adjustments	Adjusted Trial Bal.	Income Statement	Balance Sheet
Account	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit

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TOTALS
PROFIT/(LOSS)

FINANCIAL STATEMENTS

Schedules of Subsidiary Ledgers

Schedule of Accounts Receivable

as at 30 June 2017

Acc. No.	Account	Amount ($)




	TOTAL

Schedule of Accounts Payable

as at 30 June 2017

Acc. No.	Account	Amount ($)




	TOTAL	$12,740

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Income Statement

for the year ending 30 June 2017

Gross Sales
Less: Sales Returns & Allowances
Less: Sales Discounts
Net Sales

Opening stock
Add: Gross Purchases
Less: Purchase Discounts
Less: Purchase Returns and Allowances
Less: Closing stock
Cost of Goods Sold
Gross Profit

Other Revenue

Expenses
Selling Expenses
Wages Expense - Sales Staff
Advertising Expense

Administration Expenses
Freight-Out
Depreciation Expense - Store Shelving & Fittings
Depreciation Expense - Equipment
Supplies Expense
Rent Expense
Insurance Expense
Utilities Expense
Sundry Expenses
Salaries Expense–Office Staff
Bad Debts Expense

Financial expenses
Interest expense

Total Expenses

Profit Before Income Tax
Income Tax Expense
Profit After Income Tax

Statement of Changes in Equity

for the year ending 30 June 2017

	Share Capital	Retained Profits	Total Equity
Opening Balance as at 1 July 2016
Shares issued
Profit after tax
Dividends declared
Ending Balance as at 30 June 2017

Statement of Financial Position

as at 30 June 2017

Current Assets
Cash at Bank
Accounts Receivable Control
Store Supplies
Inventory
Prepaid Store Rent (Paid 1 Mar. 2017)
Prepaid Insurance (Paid 1 Nov. 2016)

Total Current Assets

Non-Current Assets
Store Shelving & Fittings
Accumulated Depreciation – Store Shelving & Fittings
Equipment
Accumulated Depreciation - Equipment

Total Non-Current Assets
TOTAL ASSETS

Current Liabilities
Accounts Payable Control
Interest Payable
Utilities Payable
Wages Payable
Salaries Payable
Tax Payable
Dividend Payable
Total Current Liabilities

Non-Current Liabilities
Bank Loan (due 1 June 2022)

Total Non-Current Liabilities
TOTAL LIABILITIES

EQUITY
Share Capital
Retained Profits (1 July 2015)
TOTAL EQUITY
TOTAL LIABILITIES & EQUITY

Post-closing Trial Balance

As at 30 June 2017

Acc. No.	Account	Debit ($)	Credit ($)
100	Cash at Bank
101	Accounts Receivable Control
102	Store Supplies
103	Inventory
104	Prepaid Store Rent (paid 1 March 2017)
105	Prepaid Insurance (paid 1 Nov. 2016)
150	Store Shelving & Fittings
151	Accum. Depreciation – Shelving & Fittings
160	Equipment
161	Accumulated Depreciation - Equipment
200	Accounts Payable Control
201	Interest Payable
202	Utilities Payable
203	Wages Payable
204	Salaries Payable
205	Tax Payable
206	Dividend Payable
250	Bank Loan (due 1 June 2022)
300	Share Capital
301	Retained Profits (1 July 2016)
	Total

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WRITTEN COMPONENT

Discuss which parts of the Accounting cycle process could have been completed automatically by using a computer software package such as ACCPAC or QuickBooks. Your answer should make reference to any specific documents or statements found in Edward's Electrical Goods Pty Ltd accounts where this occurs

As the firm is interested in developing an Accounting system in the near future, explain to

Edward Wright (the Managing Director of the company), the important phases in implementing and maintaining an Accounting system and the factors that need to be considered when developing such a system

STUDENT DECLARATION FOR COMPLETION OF WORK

Academic misconduct as defined in the "Guidelines on Ethical Scholarship, Academic Literacy and Academic Misconduct" is any activity or practice engaged in by a student that breaches explicit guidelines relating to the production of work for assessment, in a manner that compromises or defeats the purpose of that assessment. Students must not engage in academic misconduct.

Penalties for academic misconduct vary according to seriousness of the case, and may include the requirement to do further work or repeat work; deduction of marks; the award of zero marks for the assessment; failure of one or more units; suspension from a course of study; exclusion from the University; non-conferral of a degree, diploma or other award to which the student would otherwise have been entitled. For further information on the rules and procedures in respect of appropriate academic conduct you shouldvisit:

http:// www.teachingandlearning.uwa.edu.au/tl4/for_uwa_staf /policies/student_related_policies/academic_conduct

Plagiarism is one example of academic misconduct

1. Plagiarism is taking someone else's thought, writing or invention and claiming it as yourown.

2. All references to other work must be properly cited in the text eg. (Smith 1996) and the e article must be fully described in a references section including author's name, date, title, book/journal, volume/ page numbers.

The Faculty of Business has the following regulation on Plagiarism:

"The Faculty will promote the highest levels of probity and honesty amongst students and will provide instruction on

ethical conduct. By submitting assignments and other work for assessment, students acknowledge Faculty's duty to guard against plagiarism, including by electronic means such as Turnitin or Mydropbox. A lecturer may require students submitting writtenor electronic work to sign a Plagiarism Declaration Form indicating that the work is original.”

No assignment will be accepted unless the following statement is signed and dated:

"I certify that I possess a copy of the attached work submitted."

"I certify that the attached assignment/report is my own work and that all material drawn from other sources has been fullyacknowledged."

“I acknowledge that by submittingmy assignment with this generic cover page and not the automated version available to me that I will not receive an email receipt from the BusinessSchool.”

Signed Date