Task 1

Background

You are employed by Complete Business Services who provide accounting and bookkeeping services to their clients. You are managing one of the clients and have been provided with the following information and tasks:

On 31 December 2017, Clayton Textiles Pty Ltd purchased the following fixed assets:

• Computer equipment on credit for $80,000 plus GST.
• Textile Weaving equipment for $40000 plus GST.
• Factory land for $100,000 plus GST.

The computer equipment has been sold during the year on 30/9/2020 for $18000 plus GST.

The rate of depreciation is 30% for computer equipment. The useful life of the textile weaving equipment is 5 years

The servicing fee for computer equipment is $550 including GST incurred every year on 1st December.

Organisational Policies and Procedures for Clayton Textiles Pty Ltd state the following for depreciation:

• All computer equipment must be sold within three years of purchase
• Any equipment purchased should be serviced every year and the service fee should be recorded on the asset register card.
• The land will be recorded at cost and will not be depreciated. A separate asset register card need not to be maintained for the same.
• Depreciation on computer equipment should be calculated using the diminishing balance method
• The profit / loss needs to be clearly recorded on the asset register card at the time of disposal
• Depreciation on textile equipment should be calculated using the straight-line method

Complete the following tasks with the above-mentioned information. The Asset register templates have been provided to you:

a)Create and maintain a detailed Asset Register Card with complete depreciation schedule for the above fixed assets. Record the depreciation and disposal of the non-current assets as per the above organisational Policy and Procedures information and in accordance with legislative requirements

To assist with completing the Asset Register Cards for this task, you will need to:

Calculate depreciation for the financial years ended 30 June 2018, 2019 and 2020 for the textile equipment.

Calculate depreciation on the computer equipment for the financial years ended 30 June 2018, 2019 and 2020.

b)Complete the general journal entries for the disposal of assets along with recording of profit/loss on sale of the asset

\fAsset Register Card (Reverse Side) Record of Repairs and Maintenance Date Supplier Nature of Repairs Cost exc. GST GST Total Cost Accumulated CostAsset Name: Asset Cost: Less: Residual Value: Depreci able Amount: $ Depreciation method: Depreciation rate Disposal Proceeds: $ Asset Name: Asset Cost: Less: Residual Value: Depreciable Amount: Depreciation method: Depreciation rate Disposal Proceeds: $ Make Your Trip Trial Balance as at 30 June 2020 Account Name DR $ CRS Sales 300,000 Capital 21,000 Inventory 9000 C.O.G.S. 125,000 Advertising 23000 Salaries - Sales 24000 Salaries - Office 35000 Telephone 2000 Accounts Receivables 78700 Accounts Payables 23400 GST Collected 42,000 GST Paid 32,000 Stationery 500 Electricity 12000 Bad Debts 400 Bank Charges 100 Rent 8700 Commission Exp 3600 Bank 18,000 Drawings 14,400 Accrued Expenses 2000 Prepaid Expenses 2000 388400 388400Capital Date Particulars DR CR BALANCEExtract of General Ledgers: Trading Account Date Particulars DR CR BALANCE Profit & Loss Account Date Particulars DR CR BALANCETemplates Provided as below: General Journal closing Entries Date Particulars DR CRFantastic Textiles Ltd Trial Balance as at 30 June 2020 Account DR $ CR $ Bank 113,510.00 Accounts Receivable 55,000.00 GST Collected 6,500.00 Sales 389,000.00 Sales Returns 1,200.00 Service & Repairs Fees Income 98,700.00 Discount Allowed 400.00 Freight Outwards Paid 3,550.00 Accounts Payable 56,000.00 GST Paid 540.00 Discount Received 780.00 Freight Inward Paid 1,250.00 Inventory 55,000.00 Cost of Go 225,000.00 Shop Tools 45,000.00 Accumulated Depreciation - Shop Tools 12,000.00 Furniture/Fixtures & Fittings 45,000.00 Accumulated Depreciation - Furniture/Fixtures & Fittings 17,000.00 Office Equipment 35,000.00 Accumulated Depreciation - Office Equipment 14,000.00 Wages 95,000.00 PAYG 12,000.00 Wages Payable 5,500.00 Electricity 24,580.00 Advertising 35,000.00 Rent 21,150.00