Assessment One: System Design
Purpose:
To establish and implement an accounting system using information supplied in the case study of the Blue Surf.
Required:
1. Set up a company on Xero using your name Blue Surf.
2. Create and submit a chart of accounts using Xero.
3. Develop and process all transactions from the information provided into Xero to demonstrate the functionality of your system.
4. Print and submit the following required outputs:
- Trial Balance
- Inventory Item Details
- Payable Invoice Summary
- Receivable Invoice Detail
- Fixed Asset Reconciliation
On 1 January 2016 you, the owner of Blue Surf, decided to start using Xero accounting software to process your transactions. You sell three main types of inventory: Bodyboards, Surfboards, and SUPs (Stand-up Paddle Boards). You also offer a surfboard repair service.
1. Set up Chart of Accounts
Import the CSV Chart of Accounts file for Your Name Blue Surf - CoA-bluesurf-student.csv
Add the highlighted accounts in the trial balance and all the additional accounts in the list below. Note for Capital and Drawings edit the account names to include your name.
Your Name Blue Surf has the following balances (tax details in brackets for accounts you need to add) on 31 December 2015.
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Your Name Blue Surf
Trial Balance as at 31 December 2015
|
|
Code
|
Account Name
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Debit
|
Credit
|
|
601
|
Bodyboard Inventory (15% GST on expenses)
|
840
|
|
|
602
|
Surfboard Inventory (15% GST on expenses)
|
7,980
|
|
|
603
|
SUP Inventory (15% GST on expenses)
|
13,680
|
|
|
610
|
Accounts Receivable*
|
2,990
|
|
|
621
|
Bank - Blue Surf (Xero bank account)
|
2,800
|
|
|
730
|
Shop Fittings
|
60,000
|
|
|
731
|
Accumulated Depreciation on Shop Fittings
|
|
13,400
|
|
740
|
Repair Equipment (15% GST on expenses)
|
24,000
|
|
|
741
|
Accumulated Depreciation on Repair Equipment (No GST)
|
|
4,576
|
|
800
|
Accounts Payable**
|
|
2,294
|
|
820
|
GST
|
|
1,020
|
|
905
|
Loan - MNZB
|
|
19,000
|
|
971
|
Capital - Your Name
|
|
72,000
|
|
|
|
112,290
|
112,290
|
|
* The Accounts Receivable represents $2,990 owed by Paddle Safe.
**The Accounts Payable represents $2,294 owed to Surf Co.
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The following additional accounts are required to be added to the imported Chart of Accounts file:
|
Code
|
Account Name
|
Account Type
|
Tax details
|
|
201
|
Bodyboard Sales
|
Sales
|
15% GST on income
|
|
202
|
Surfboard Sales
|
Sales
|
15% GST on income
|
|
203
|
SUP Sales
|
Sales
|
15% GST on income
|
|
211
|
Surfboard Repair Fees
|
Other Income
|
15% GST on income
|
|
301
|
Bodyboard COGS
|
Direct costs
|
No GST
|
|
302
|
Surfboard COGS
|
Direct costs
|
No GST
|
|
303
|
SUP COGS
|
Direct costs
|
No GST
|
|
432
|
Bank Charges
|
Expense
|
No GST
|
|
434
|
Shop Insurance
|
Expense
|
15% GST on expenses
|
|
811
|
Total Engineering*
|
Current Liability
|
No GST
|
|
* The supplier, in this example, for the credit purchase of plant or equipment
|
2. Enter opening balances
Set the Conversion date to 1 January 2016
Enter the opening/conversion balances from the trial balance at 31 December 2015, by selecting settings-> Conversion Balances.
Complete the opening balance invoice for the accounts receivable, and the opening balance bill for accounts payable.
3. Add Inventory items
Set up the following inventory items for Your Name Blue Surf.
|
|
Bodyboards
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Surfboards
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SUPs
|
|
Cost price excluding GST
|
$42.00
|
$399.00
|
$684.00
|
|
Selling price excluding GST
|
$86.00
|
$746.00
|
$1,300.00
|
|
Quantity on hand
|
20
|
20
|
20
|
In order to enter the quantity on hand, opening balances need to be created and imported.
4. Process the following transactions in Xero:
|
Date
|
Transactions
|
|
2016 Jan 4
|
Purchased 7 bodyboards and 5 SUPs on credit from Sea Gear.
|
|
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Purchased 10 surfboards on credit from Surf Co.
|
|
7
|
Paid KiwiSurf for marketing $1,362.75 using online bill payment #7210.
|
|
7
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Cash sales (EFTPOS): 6 bodyboards, 4 surfboards and 2 SUPs
|
|
7
|
Cash received for surfboard repairs (EFTPOS) $235.70
|
|
8
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Sold 5 bodyboards and 8 surfboards to Raglan Surf School on credit. Gave them a 15% discount on the body boards and a 20% discount on the surfboards. Record each discount in the discount column of the invoice.
|
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11
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Sold 5 SUPs to Paddle Safe on credit.
|
|
12
|
Used the business EFTPOS card at The Warehouse, total $147.99. Of this
$120.00 cash out was for personal expenses, the remainder was for business stationery. Business stationery is included in Office Expenses.
|
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14
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Paddle Safe returned 1 SUP purchased on 11 January 2016
|
|
15
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Returned 2 bodyboards purchased on 4 January 2016 to Sea Gear.
|
|
15
|
Paid B Kane $2,725.73 for wages by online bill payment #3100
|
|
16
|
Surfboard repairs (EFTPOS) for $297.90
|
|
16
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Cash sales (EFTPOS): 3 SUPs
|
|
16
|
Paid monthly Xero account $50.00 by online bill payment #2001. The Xero account is included in Office Expenses.
|
|
21
|
Paid Surf Co $1,500 in part payment of the amount due on 31 December 2015. Bill payment #4100
|
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21
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Charged Sam Hewitt $100.00 for surfboard repairs.
|
|
22
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Monthly cash drawings transferring $4,500 from the business bank account to your personal bank account.
|
|
22
|
Purchased 11 bodyboards and 9 SUPs on credit from Sea Gear. They added a freight charge of $55 excluding GST.
|
|
23
|
Sold 2 SUPs on credit to V Jacobs. Added $47 excluding GST for repairing V Jacobs old surfboard.
|
|
24
|
Pacific Media charged $2,400 for advertising in NZ Surfing magazine. Advertising is included in the Marketing account.
|
|
25
|
Cash sales (EFTPOS): 5 Bodyboards, 3 Surfboards and 4 SUPs
|
|
25
|
Import the bank statement file BS-surf.csv and complete the bank reconciliation process
Note:
- Telco Direct Debit is for Phone & Website
- Max Energy Direct Debit is for Electricity
- A2 Property Direct Debit is for Shop Rent
|
|
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- Direct credit from Paddle Safe is in full settlement of their 31 December 2015 balance
- Direct credit from Raglan Surf is in part payment of their invoice. Other items should be self-explanatory
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28
|
You gave one SUP to your dad for his birthday.
|
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28
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One bodyboard has been damaged beyond repair and needs to be written off.
|
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30
|
Last month phone & website expense of $253.20 was posted in error to electricity. Correct this error.
|
|
30
|
Last month shop insurance of $1,700 was posted in error to depreciation on shop fittings. Correct this error.
|
|
31
|
Total Engineering charged $25,300 for the purchase and installation of new shop fittings.
|
|
31
|
Sold old shop fittings for cash $3,105.
The shop fittings originally cost $10,000 excluding GST. Straight-line depreciation at 15% p.a. has been recorded for five full years.
At the date of disposal an additional three months depreciation is required to be recorded.
Record the following:
- Three months depreciation at 15% p.a. straight line
- Transfer of the shop fittings to the Shop Fittings Disposal account.
- Write off accumulated depreciation to the Shop Fittings Disposal account.
- Record the cash sale of the old shop fittings using a Receive Money transaction.
- Record the loss or gain on disposal - review the Shop Fittings Disposal Account Transactions to determine whether you need to record a loss or gain on disposal.
When you have completed all of the above review the Shop Fittings Disposal account to ensure the balance is now zero.
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Note: All amounts include GST where relevant unless otherwise stated. All invoices and bills are due on 20 February 2016.
Attachment:- Assignment.rar