Question

QUESTION 6 (7 + 1 = 8 marks)

Porcelain is a manufacturer of ceramic products. Its management has projected values for the following account balances as at June 30, 2021. Projected loss for the financial year ending June 30, 2021 is $700.

Required:

Prepare a classified Balance Sheet for Porcelain as at June 30, 2021.

Account titles	Projected balance ($)		Account titles	Projected balance ($)
Accum. Dep. – Equipment	12,400		Inventory	5,100
Bank Loan (due in 5 years)	16,800		Equipment	48,900
GST Collected	7,400		Bank overdraft	3,650
Bank Loan (due in 5 months)	3,200		GST Paid	4,700
Share Capital	39,600		PAYG Withheld	6,350
Distributions to owners	15,000		Prepaid Rent	7,200
Accounts Payable	25,300		Accounts Receivable	29,800
Prepaid Insurance	6,500		Wages Payable	3,200

Porcelain Projected Balance Sheet as at June 30, 2021

Assets	($)	($)	Liabilities + OE	($)	($)

Based on the projected account balances above, calculate the value of payment to or refund from the ATO Porcelain would report in its Business Activity Statement for the period ending June 30, 2021.

(1 mark)

Answer 1

CURRENT ASSETS
Bank overdraft	3,650
PAYG withheld	6,350
Inventory	5,100
Accounts Receivable	29,800
Prepaid Insurance	6,500
Prepaid Rent	7,200
TOTAL CURRENT ASSETS	51,300
Equipment, net of accumulated depreciation	36,500
TOTAL NON- CURRENT ASSETS	36,500
TOTAL ASSETS	87,800
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Bank overdraft	3,650
Bank Loan (due in 5 months)	3,200
Accounts Payable	25,300
GST Payable	2,700
Wages Payable	3,200
Total Current Liabilities	38,050
NON-CURRENT LIABILITIES
Bank Loan (due in 5 years)	16,800
TOTAL NON- CURRENT ASSETS	16,800
STOCKHOLDER'S DEFICIT
Share Capital	39,600
Distributions to owners	15,000
TOTAL STOCKHOLDER'S DEFICIT	24,600