BFA104 Accounting Context and Method : Inventory System

Questions:

Question 1
The following summarised transactions, for the financial year ending June 30 2021, relate to the business of Emma Clarke, a sole trader, who sells men’s and women’s clothing.  Emma uses a perpetual inventory system in the business.  Transactions are GST inclusive. 
1.Purchased clothing with a list price of $330 000 on credit.  As this was a bulk purchase the supplier gave a trade discount of 15% off the list price.  Emma paid cash of $4 400 for transportation inwards costs.
2.Made cash sales of $220 000 and credit sales of $143 000.  Cost of goods sold was $137 000.
3.Some of the clothing purchased during the year was damaged upon delivery.  The clothing was returned to the supplier who agreed to cancel $3 300 of the original purchase.
4.Paid $44 000 for sellingand administrative expenses.
5.Paid cash totalling $270 000 to suppliers having received discounts totalling 
$11 000 for prompt payments.
6.Unhappy credit customers returned clothing with a selling price of $3 300 and these were returned to stock.  The cost of goods returned was $1 500.
7.Received cash totalling $110 000 from trade debtors having given discounts of 
$5 500 for prompt payments.
8.After trading finished on 30 June 2021, a stocktake showed that the cost of unsold clothing on hand was $165 000.
The Inventory Ledger Account, prior to the transactions listed above, had a balance at 
1 July 2020 of $55 000.
Required:
a.Prepare the general journal entries to record the above transactions.  You are not required to complete narrations or posting references.  Use the Excel template provided.
b.Complete the Inventory ledger account (running balance format).  You are not required to complete posting references.  Use the Excel template provided.
c.Emma is concerned about regular stock shortages that have been revealed in the end of month stocktakes.  What type of decisions could Emma make to prevent stock shortages?
Question 2
All transactions below relate to Genco Enterprises Ltd.’s uncollectable accounts for the financial year ended 30 June 2021.  Transactions are GST inclusive.
Jul 13    Wrote off as bad the account of Riley Enterprises Ltd.  The account had a balance of $4 400.
Aug 18    Received $1 300 of the $2 400 owing from Satriale’s Fine Meats.  The remainder was written off as a bad debt.
Oct 10    Re-established the account of A. Peterson and recorded the collection of 
$2 200 in full payment of the account which was previously written off as a bad debt.
Dec 1    Received a formal notification that S. Donaldson was insolvent and wrote off the $990 owing on her account as uncollectable.
Mar 3    Received 50% of the $3 300 owing by MK Constructions and wrote off the remainder as a bad debt.
Apr 25    Received $5 500 from La Mana’s Bakery in full payment of the account which was previously written off as a bad debt.
Jun 30    The Allowance for Doubtful Debts account needs to be adjusted to 5.5% of the Accounts Receivable Control account balance.
The Accounts Receivable Control account had an opening balance of $291 090 at 1 July 2020.  The opening balance of the Allowance for Doubtful Debts account was $3 300 credit.
Required:
a.Prepare the general journal entries to record the above transactions.  You are not required to complete narrations or posting references.  Use the Excel template provided.
b.Complete the Accounts Receivable Control account (running balance format).  You are not required to complete posting references or individual subsidiary ledgers for each debtor.  Use the Excel template provided.
c.The management of Genco Enterprises Ltd are concerned about the number of debtor accounts that are overdue.  Overdue accounts seem to be a regular occurrence.  What type of decisions could management make in order to improve the collection times of these accounts?
Question 3
Below is the Cash Receipts Journal, Cash Payments Journal, Cash at Bank Ledger account and Bank Statement of Tacoma Importers for the month ending May 31 2021. 
The bank reconciliation prepared in the previous month showed an outstanding deposit of $610 and the following outstanding cheques: no. 204 for $615 and no. 221 for $90.  The balance as per the cash at bank ledger account was $4667 DR.

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