Calculate the outstanding payroll liability

Assignment Help Accounting Basics

Reference no: EM131231093

Part A

As at the 1stMay, Katy Perry establishes a new business Katie's Bridal Services as a sole trader. The business will hire out bridal gowns and other accessories as well as provide professional services to the general public. She registers the new business and opens a new bank account with the local branch of Eastside Bank. Note the business is also registered for GST.

Adjustments

- Calculate the outstanding payroll liability (2 days for each employee)
- Calculate and record the insurance expense for the two months
- Calculate and record the Telephone expensefor the two months
- Calculate and record the prepaid rent (5 Days)
- Calculate and record the depreciation expense for the 2 Months
- A stocktake of the Accessories revealed that there were:
o 19 Bouquets
o 7 Buttonhole Sprays
o 4 Headpieces
- Any discrepancy with the calculated FIFO inventory is to be written off to account 6065 Stock write off expense
- Only 10 days of the 30 days advertising has been used.

Note All adjustments rounded up to nearest full dollar amount.

Part B. (This should be done in your assignment in the Report Worksheet)

Write a brief report to Julie and Katy commenting on the financial performance of the business:
- Calculate the following financial ratios and provide comments -
o Current ratio
- Industry average is 5:1
- Accounting Norm is 3:1
o Quick ratio
- Industry average is 4 : 1
- Accounting Norm is 1:1

- Calculate and provide a cash flow statement for the first month of trading.
- List and briefly explain the registrations and legal requirements that Katy would have undertaken to establish the business name as a sole trader.
- Katy is contemplating forAlex Perry a partnership or a company. What extra General Ledger accounts would have to be created for
- A Partnership
- A Company

Attachment:- assignment.zip

Reference no: EM131231093

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