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FNSBKG404 Complete Business Activity and Instalment Activity Statements

This assessment has 4 parts:

  • Part A – Letter & Interview
  • Part B – Assignment - summarising client transactions and bank reconciliation, in order to prepare Business Activity
  • Part C – Completion of Business Activity Statement in Exam
  • Part D – Theory Component

Part A – Letter & Interview

  • You will receive an email (below) from a new client “Eloise” asking for some advice.
  • You will need to research the questions and prepare answers to these questions in a letter format. The written copy of your letter needs to be uploaded onto Dropbox by the due date as outlined in the Unit Assignment Guide.
  • The letter will be provided to the client (your teacher) and then a “client interview” will be arranged wherein you will have a one on one, face to face, meeting between yourself, the (bookkeeper) and you client (the teacher).
  • As well as the accuracy of your answers you will also be assessed on your professionalism (verbal and non-verbal) – i.e. use of appropriate language relevant to your audience (a client), appropriate dress and body language, listening to the client.

1. You are required to prepare a professional letter answering Eloise’s questions.

Pay particular attention to the requirements of a business when they begin trading as well as the considerations when deciding if they need to register for GST.

Please note, do not simply copy from a text book or website. Summarise and explain using terms that non-accounting trained clients could understand.

Use appropriate, professional language. Use correct spelling, grammar and punctuation.

2. You should also include any other relevant legislation and the governing bodies that the client should be aware of.

3. You also need to advise the obligations of a business owner when employing

If there is any information you need clarified or further information you feel you need, you should post questions on the Discussion Board on Connect, in the manner you would use to email a client with queries.

4. You will also need to deliver this information in a face to face meeting with the client (your teacher).

5. You will be required to dress and act in a professional manner, as if you are a BAS Agent meeting with a client (not a student and a teacher).

PROFESSIONAL EMAIL, NEW CLIENT TO AGENT

Good afternoon,

My name is Eloise. I have recently purchased a Boutique shop called Country Cottage Fair. At the moment I will be operating as a Sole Trader and I will employ two (2) casual staff (shop assistants).

I would like your advice on what I need to do to start operating my business. I would also like to know what my obligations are as an employer.

Yours faithfully

Eloise Apel

Part B – Assignment

COUNTRY COTTAGE FAIR is a boutique selling country fashion and homewares.

Eloise engaged you as a bookkeeper to summarise her transactions in order to prepare the monthly June 2018 Business Activity Statement. Eloise is registered for GST on a cash basis.

Eloise also has a residential rental property.

You are to:

  1. Process the following transactions in the attached MYOB file, ensuring correct Tax Codes are used. (as take home assignment)
  2. Prepare a Bank Reconciliation
  3. Generate GST Detail – Cash report for the month of June.
  4. Generate MYOB BAS Report, via BASLINK in MYOB. (Note: Ensure you have setup lables correctly to allow MYOB to calculate the correct figures at the correct lable)
  5. Calculate and reconcile GST figures to be completed on BAS (Reconcile GST Detail Report and BASLINK BAS Report).
  6. Prepare the journal entry to record payment of the Business Activity Statement.
  7. Complete the ledger accounts below (GST Collected, GST Paid, PAYG Withholding Liability, Wages Expense Account) based on your above calculations. Reconcile the closing balances of the ledger accounts to the figures to be completed on the BAS. (See journal entry Q4 above).
  8. Review and advise Eloise of payment options and cashflow requirements to meet lodgement and payment obligations. Advise Eloise of who is authorised to sign the Activity Statement.

Part C – Completion of Business Activity Statement

The Business Activity Statement, based on the above information, will be completed during your Semester Exam.

The Business

Eloise has provided you with a range of information. She has provided the following documentation:

  • Bank Statement for June 2017
  • List of transactions for the month of June

Important Business Information

Establishment:

Eloise established her business on 1st June, 2018.

Registration:

She registered her business as follows:

Registered Business Name: COUNTRY COTTAGE FAIR

ABN: 11 456 125 987

Further Information:

June 1, 2017: Eloise contributes the following cash to her business.

Cash $110 000

Organisational Policies & Procedures:

GST Reporting

  • Cash Basis
  • Eloise Apel is authorised signatory of BAS

Wages – Fortnightly payments

Computerised Accounting System – MYOB

  • Outgoing documents are to be completed in non-erasable black or blue pen.
  • Numbered outgoing documents must be completed in their number sequence.
  • Numbered documents are not to be destroyed. Any document which cannot be corrected is to be “Cancelled” and retained. (The word Cancelled is to be written diagonally across the document, and the document is to be signed and dated.)
  • Errors on documents are to be corrected by drawing one line through the error and writing the correction above the error.
  • Corrections are to be initialled by the person making the correction.
  • Outgoing documents are to be checked for accuracy and corrected before leaving the business
  • Tax Invoices from Suppliers are to be checked to ensure they include supplier’s ABN, otherwise supplier should be contacted by telephone. ABN must be received before payment can be made. If it is not, 47% must be withheld and reported on the BAS.

COUNTRY COTTAGE FAIR

Accounting Records – Transactions for June 2017

Date

Transactions Summary

$

June 1

Paid Rent (June) to Doug Pitt Commercial Property (incl GST)

(3300)

(Chq0011)

Cash Register:

Retail Sales

1100

(Receipts are not always banked daily. They can accumulate for several days. See the bank statement)

Purchased Tea and Coffee (Coles) for Office

(123.50)

June 4

Cash Register:

Retail sales

2299

June 5

Received Payment from Customer:

A J Simpson Gift Shop:

1100

June 7

Cash Register:

Retail sales

2497

June 8

Cash Register:

Retail sales

3498

June 12

Cash Register:

Retail sales

1496

Paid Handy Services for repairs rental property (incl GST)

(475)

Chq0012

Paid Clean 4 Us Service Chq0013 (not registered for GST)

(164)

June 13

Cash Register:

Retail sales

1452

June 14

Cash Register:

Retail sales

880

June 15

Paid Star Promotions for ongoing campaign

(759)

Chq0014 (incl GST)

Purchased Stock

Jade Fashions: (incl GST)

(3750)

Paid Wages (PAYGW $3412)

(7405)

Received payment from: A J Simpson Gift Shop: $629 cash

629

Received residential rental income

2200

June 18

Cash Register:

Retail sales

3795

June 19

Cash Register:

Retail sales

2596

June 20

Cash Register:

Retail sales

1100

June 21

Paid Jade Fashions BPAY

Paid Cotton Fashions incl GST Chq0015

(3750.00)

(1175.63)

Paid Lavender Shop BPAY (incl GST)

(2376)

June 22

Cash Register:

Retail sales

1342

Paid Southside Accounting Services – Accounting Fees& Chq0016 (Not registered GST)

(2750)

Paid Future Computer Consulting (Includes GST) Chq0017 (consulting fees)

(2200)

Paid for Future Computer Consulting for Business

(400)

Accounting Software Chq0018 (incl GST)

Paid Future Computer Consulting for computer equipment (includes GST) Chq0019

(7250)

June 25

Cash Register:

Retail sales $1892

Service fees $440

2332

June 26

Paid Cleaning 4 Us Services

(144)

Chq0021(not registered for GST)

Purchase of Stock

Bali Furniture (imported) (Paid

Chq20)

(2395)

Received payment (cash) from:

TS Chemists and Gifts: Rec103

5238

The Gift Shop: Rec104

5940

June 27

Cash Register:

Retail sales $1793

1793

June 28

Cash Register:

Retail sales $660

660

Paid Rent (July) to Doug Pitt Commercial Property

(3300)

(includes GST) Chq0023

June 29

Cash Register:

Retail sales $2354

2354

Paid Eastern Electricity, Electricity for the quarter 1 June to 31 August

(451)

Chq0024 (incl GST)

Paid Wages (PAYGW $704 )

(2298.50)

Paid Fuel (Chq 0025) (incl GST)

(1346)

Paid VA Phone, for the month of June (80% business)

(440)

Chq0026(incl GST)

Paid Business Insurance Policy

(12 000)

Chq0027 (incl GST)

Paid Legal Expenses for Borrowing to Hasnet Legal Associates

(1485)

Chq0028(incl GST)

Western Bank

BANK STATEMENT

COUNTRY COTTAGE FAIR

1-Jun-17 to 30-Jun-17

June

Dr

Cr

Balance

$

$

$

1

Deposit

110,000.00

110,000.00

EFT - Coles

123.50

109,876.50

Cheque 0011

3,300.00

106,576.50

Deposit

1,100.00

107,676.50

4

Deposit

2,299.00

109,975.50

14

Deposit

10,923.00

120,898.50

Cheque 0013

164.00

120,734.50

15

EFT wages

7,405.00

113,329.50

Rent Received

2,200.00

115,529.50

18

Deposit

4,424.00

119,953.50

19

Deposit

2,596.00

122,549.50

Cheque 0014

759.00

121,790.50

Cheque 0012

475.00

121,315.50

20

Deposit

1,100.00

122,415.50

21

BPAY – Jade Fashions

3,750.00

118,665.50

22

Cheque 0015

1,175.63

117,489.87

26

Deposit

14,852.00

132,341.87

Cheque 0016

2,750.00

129,591.87

Cheque 0017

2,200.00

127,391.87

Cheque 0018

400.00

126,991.87

Cheque 0019

7,250.00

119,741.87

28

Deposit

2,453.00

122,194.87

Fees/Charges

122.00

122,072.87

Cheque 0021

144.00

121,928.87

29

EFT wages

2,298.50

119,630.37

Cheque 0024

3,300.00

116,330.37

EFT – Caltex

1,346.00

114,984.37

Withdrawal - Eloise

4,000.00

110,984.37

BPAY Lavender Shop

2,376.00

108,608.37

General LedgerAccounts


Wages Expense Account:
							DR		CR	Balance
1/6/17	Openning Balance							     0
15/6/17	Gross Wages
29/6/17	Gross Wages
28/7/17	Bank (Payment of BAS)



PAYG Withholding Liability Account:
							DR		CR	Balance
1/6/17	Openning Balance							     0
15/6/17	PAYGW
29/6/17	PAYGW
28/7/17	Bank (Payment of BAS)

GST Collected Account:

							DR		CR	Balance
1/6/17	Openning Balance							     0
30/6/17	Cash Receipts Jnl
28/7/17	Bank (Payment of BAS)

GST Paid Account:
							DR		CR	Balance
1/6/17	Openning Balance							     0
30/6/17	Cash Payments Jnl
28/7/17	Bank (Payment of BAS)


FIGURES FOR COMPLETION OF BAS

1A
1B

W1
W2

Part D – Theory Component

Question 1

Define a “BAS Service” and provide 3 examples.

Question 2

Explain the Wine Equalisation Tax

Question 3

What document sets out the ethical guidelines in relation to BAS Agents?

Question 4

How does the Privacy Act relate to being a BAS Agent?

Question 5

What is an Input taxed sale? Give 3 examples. (Refer to the relevant section in the GST Act in your answer.)

Question 6

In what way is the treatment of GST free sales different to the treatment of input taxed sales if they both have 0% GST?

Question 7

For an entity with a turnover of less than $20 million when are Business Activity Statements (BAS) due to be lodged and paid?

Question 8

Describe the process and requirements of registering to become a BAS Agent.

Question 9

A client comes to you wanting Income Tax and Financial Planning Advice. You explain that you are not qualified or licensed to give that advice. They insist that you are the only person they trust and would rather pay you twice your normal rate than go through the hassle of finding an Accountant and Financial Planner.

How would you deal with this situation and what would you advise the client?

What suggestions and information would you give the client?

Question 10

Explain the differences between cash and accrual reporting for GST.

Question 11

Three of the obligations of the TPB Code of Professional Conduct are Competency, Independence and Honesty and Integrity. Provide an example of applying this rule to a BAS Agent’s practice. Outline a policy and procedure within the BAS Agent’s business that would ensure compliance with each obligation.

Question 12

Outline the Civil Penalty Provisions in relation to preparation and lodgement of Instalment and Business Activity Statements.

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