Prepare the bank reconciliation statement for packmasters

Assignment Help Accounting Basics

Reference no: EM133900132

Accounting Processes

INSTRUCTIONS

This assignment is designed to allow accounting students to prepare a set of accounts manually. Each group must work on this assignment on their own. Collusion between groups is not permitted. The assignment will be marked on effort and not only on the correct answer. It is expected that groups will get different answers because of the assumptions made. Ensure the work your group submits is your work and not copied or taken from other groups. Any evidence of collusion or copying will be treated very seriously and reported as academic misconduct This assignment is designed to illustrate how the accounting process works, so use it as a learning tool rather than worrying about what other groups are doing. Get online assignment help from Ph.D. experts!

COMPANY BACKGROUND
PackMasters Ltd began business on 1 July 2024, specialising in the purchase and supply of packaging materials. An accounting system was designed, and a chart of accounts was established. The business uses the periodic inventory system and is registered for GST at the rate of 10%.

The company also employs two office staff who work a five-day week from Monday to Friday. One office staff member is responsible for overseeing the daily running of the business, including inventory ordering; the other maintains the company's accounting records.

ACCOUNTING SYSTEM
The company has a financial year-end 30 June and prepares adjusting entries only at the end of the year. The firm uses the following journals to maintain its accounting records:
Sales Journal: to record all credit sales of inventory
Purchases Journal: to record all credit purchases of inventory
Cash Receipts Journal: to record all cash receipts
Cash Payments Journal: to record all cash payments
General Journal: to record all transactions other than the above
PackMasters Ltd uses subsidiary ledgers for Accounts Receivable and Accounts Payable only. The company maintains a general ledger to record the increases and decreases in each asset,
liability, owner's equity, revenue and expense account. Subsidiary ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. The company maintains a periodic system to account for its inventory.

YOUR ASSIGNMENT
The firm's in-house accountant has gone overseas for one month. You have been hired by PackMasters Ltd to carry out the accounting duties in the accountant's absence. This assignment provides you with the unadjusted trial balance at the end of May and requires you to:
Record typical transactions for a retail business for the last month of the financial year.
Once these transactions have been recorded and posted, you are required to complete the accounting cycle by journalising and posting adjusting and closing entries and preparing financial statements.

TRANSACTIONS
The following transactions occurred during June 2025 and are INCLUSIVE of GST where appropriate.

2025
June 1 PackMasters Ltd shareholders invested $40,000 cash in the business.
Purchased land and an existing retail store for $98,000 of which $68,000 is considered land cost. Paid $28,000 by cheque no. 98 for the retail store and signed a mortgage payable for the balance. The retail store is depreciated over its useful life of 10 years.
2 Paid Omega Ltd 4300 less a discount of $200 with cheque no. 99.
Received cheque from Beta Corp. for $15,000 as part payment of his account Purchased store furniture on credit terms from Corma Ltd for $7,480, terms n/60.
5 Purchased inventory on credit terms from Delta Ltd $4,400; invoice date 6 June, terms 2/10, n/60.
7 Sent cheque no. 101 to Delta Ltd in full settlement of May invoice
8 Purchased inventory for $5,500, cheque no. 102.
Paid Omega Ltd $5,260 cheque no. 103 for the balance owing on May account.
9 Returned unsatisfactory goods to Delta Ltd and received a credit note for $880.
13 Sold inventory to Beta Corp. on account, $9,020; invoice no. 210, terms 1/10, n/30. 15 Gamma Pty Ltd paid their account in full.
Paid Delta Ltd amount due for June 6 invoice, cheque no.104. Cash sales for period to 15 June were recorded today, $3,740.
16 Sold inventory to Gamma Pty Ltd on account $5,170; invoice no. 211, terms 1/10, n/30.
Paid salaries for period to 15 June totaling $2,650, cheque no. 105.
17 Beta Corp. paid the balance of his May invoice.
20 Purchased inventory on credit terms, from Omega Ltd, $5,390; invoice date 20 June, terms 1/10, n/30.
Sent cheque, no. 106 to Sigma Supplies in full settlement of the account.
22 Received account for $143 from M. Parson for items chargeable to office expenses, terms n/30.
23 Received inventory returned by Gamma Pty Ltd and issued a credit note for $2,200.
Received a cheque from Beta Corp. for invoice no. 210.
26 Received a cheque from Gamma Pty Ltd for the balance due on invoice no. 211

Purchased inventory from Sigma Supplies for $35,750, terms, 1/20, n/30.
29 Sold inventory worth $15,400 on credit to J. Rowls; invoice no. 212, terms 1/10, n/30.
Paid $220 for electricity expenses, cheque no. 107.
Paid Omega Ltd for the invoice dated 20 June, cheque no. 108.
30 Purchased inventories on account from Amcor Ltd $26,400, terms 2/10, n/30.
Cash sales from 16 June to 30 June were $2,145.
Paid salaries for the period 16-30 June, totalling $2,850, cheque no. 109. Purchased office supplies for $330, cheque no. 110.
Received an account from C. Bond for $110 for delivery expenses for the month.
Sold inventory on credit to Gamma Pty Ltd for $17,600, invoice no. 213, terms 1/10, n/30.
Purchased a printer for use in the business office at a cost of $825 using a short-term loan.

Required
Record the transactions in the special journals in the following order:
sales journal,
purchases journal,
cash receipts,
cash payments and
general journal.

Note:
You will need to use the general journal for more adjusting entries. The business uses sales and purchases journals for inventory transactions on credit only. Returns are processed through the general journal. (Remember that special journals replace the general journal, so transactions will be recorded in a special journal or the general journal but not both).

Prepare the accounts receivable control account as it would appear in the general ledger at the end of the reporting period, together with the related subsidiary ledger. Provide the accounts payable control account as per the general ledger at the end of the financial year and the subsidiary ledger.
Prepare general journal entries to record the following information.
Office supplies on hand at 30 June total $400
The one-year general insurance policy expires on 31 October 2025
Equipment has a useful life of 4 years with no residual value. Store furniture and Printer have a useful life of 5 years with no residual value. PackMasters Ltd uses straight-line depreciation for these assets. (Round all depreciation amounts upwards to the nearest whole $).
Commission revenue of $ 19,600 has accrued during June.
Inventory at 30 June is $18,800

Additional Information
At the end of the 2025 financial year, PackMasters Ltd identified the following items that need to be resolved before financial statements are prepared. GST has been correctly accounted for on these non-current asset transactions.

On 1st July 2024, PackMasters Ltd purchased a used machine for $35,000 cash. The cost was debited to the "Machinery" account in the ledger. Prior to use, additional expenses were incurred for installing and testing the machine. These costs amounted to
$3,225 and were debited to the "repairs and maintenance expenses" account. The installation and testing were completed on 1st October 2024, and the machine was brought into use on that date. The machine has an estimated useful life of 5 years, with a residual value of $1,450. PackMasters uses straight-line depreciation for machinery and records depreciation to the nearest month. No depreciation has yet been provided in respect of this asset in the current year.

On 2nd July 2024, a small building and land were purchased for $60,000. The purchase price was determined by appraisers based on a fair value of $40,000 for the land, and $20,000 for the building. The total purchase consideration of $60,000 was debited to the "land" account. The building has an estimated useful life of 10 years with no residual. PackMasters uses straight-line depreciation for buildings. No depreciation has yet been provided for the building in the current year. On 1 June 2025, PackMasters decided to adopt the revaluation model and to measure its land and buildings at fair value in the balance sheet. A valuation was carried out on 30 June 2025, and the land was valued at $95,000. No entries have yet been passed concerning these fair values. The fair value of the land and retail store acquired on 2nd June 2025 has not changed.

A new truck was purchased on 31st March 2025. PackMasters Ltd paid cash of $23,050. The truck has an estimated useful life of 4 years with a residual value of $6,650 and is to be depreciated using the reducing balance method (using a rate of 1.5 times the straight-line rate). No depreciation has yet been provided in respect of this asset in the current year.

REQUIRED:
Prepare any adjusting or correcting entries required as at 30 June 2025 in relation to the additional information provided above.

Any entries necessary in respect of depreciation for each class of non-current assets discussed in the information given for the year ended 30 June 2025

PackMasters Ltd uses the allowance method of accounting for bad debts. One percent of net credit sales is estimated to be uncollectable for the year ended 30 June 2025 (round amount upward to nearest whole $). On 30 June, PackMasters Ltd was notified by the lawyers of Alpha Ltd that they had been declared bankrupt and were unable to pay the amount owing. This debt was subsequently written off.

Using the information provided;

Prepare the Cash at Bank account at 30 June 2025 using a "T" account (any required adjustments as a result of the bank reconciliation, should be made through the cash journals).

Prepare the Bank Reconciliation Statement for PackMasters Ltd at 30 June 2025.

Prepare a fully classified profit or loss statement for the year ended 30 June 2025 and a balance sheet at 30 June 2025 showing all assets, liabilities and equity items for PackMasters Ltd. Also show how the sales account would appear in the general ledger at the end of the accounting period and the GST paid account (T accounts are preferred).

Attachment:- Accounting Processes.rar

Reference no: EM133900132

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