Question

QUESTION 1 (25 + 10 + 15 = 50 marks) Jules Vern had worked as a business consultant for several years with KPNY, one of the ‘big four’ accounting firms. Jules has recently gone into her own private practice trading as Vern Business Solutions. a) You are required to record the following transactions into the transaction analysis chart (template provided). Dates are as follows:- January 1 Invested $100,000 of her own funds into a business bank account. 2 Purchased a small office premises in Box Hill for $250,000. Jules paid a 10% deposit and the balance was financed through a mortgage with Gotcha Banking Corporation. A three-month subscription for online access to taxation updates was purchased for $2,400 cash. 3 Office furniture was purchased for $12,000 cash. Paid $2,400 for professional indemnity insurance for 12 months. 4 Jules purchased computer equipment for $8,000 cash and a motor vehicle for $24,000 was acquired on 90 days credit terms. 5 Jules invoiced her first client $2,000. 6 Office supplies were purchased for $800 on 30-day credit terms. 10 Invoiced clients $4,800 for consulting services performed. 17 Received full payment from her first client. 18 Hired an office assistant on a casual basis. 21 Invoiced clients $7,200. Jules withdrew $1,500 for personal use. 24 Received $2,300 from credit clients.

27 The Whitehorse Small Business Association have agreed to retain Jules’ services in the future at a rate of $1,800 per day.

28 Invoiced corporate clients for work performed $8,400

30 Paid wages to office assistant totaling $1,800, $500 of which was deducted for PAYG tax and will be remitted to the Australian Tax Office in the future.

31 Made a part payment of $200 for the office stationery.

Paid motor vehicle expenses for the month totaling $240.
Received $2,500 from credit clients.
Jules withdrew $2,200 from the business, of which, $1,200 was for a one-off payment for professional membership joining fees to Business Consulting Australia, the relevant professional body, and $1,000 for a holiday to Hawaii.

Additional information:

• As at 31 January, $400 of office supplies had been consumed.

• As of 31 January, $950 interest has accrued on the mortgage.

• Utilities owing at balance date are $420

• Motor vehicle is depreciated at 20% per annum straight line.

• Computer equipment is depreciated at 30% per annum reducing balance.

• Office Furniture is depreciated at 10% per annum straight line.

• Assume a full month for depreciation and no residual value.

• Round to nearest dollar.

• Ignore GST

Transaction Analysis Chart

Assets	Liabilities	Owner’s equity

• Add extra rows (pages) as needed.

b) Prepare the fully classified Income Statement and Balance Sheet for January 2020.

Tips to solve the question:

First, read the information in part a and fill the transaction analysis chart

Then make a income statement followed by making a balance sheet with complete working

Answer 1