Assignment Details:
As at the 1stMay, Katy Perry establishes a new business Katie's Bridal Services as a sole trader. The business will hire out bridal gowns and other accessories as well as provide professional services to the general public. She registers the new business and opens a new bank account with the local branch of Eastside Bank. Note the business is also registered for GST.
Part A- Adjustment
-Calculate the outstanding payroll liability (2 days for each employee)
-Calculate and record the insurance expense for the two months
-Calculate and record the Telephone expense for the two months
-Calculate and record the prepaid rent (5 Days)
-Calculate and record the depreciation expense for the 2 Months
-A stock take of the Accessories revealed that there were:
- 19 Bouquets
- 7 Buttonhole Sprays
- 4 Headpieces
-Any discrepancy with the calculated FIFO inventory is to be written off to account 6065 Stock write off expense
-Only 10 days of the 30 days advertising has been used.
-Note - All adjustments rounded up to nearest full dollar amount.
Part B- (This should be done in your assignment in the Report Worksheet)
Write a brief report to Julie and Katy commenting on the financial performance of the business:
Calculate the following financial ratios and provide comments:
-Current ratio
- Industry average is 5:1
- Accounting Norm is 3:1
-Quick ratio
- Industry average is 4 : 1
- Accounting Norm is 1:1
Calculate and provide a cash flow statement for the first month of trading.
List and briefly explain the registrations and legal requirements that Katy would have undertaken to establish the business name as a sole trader.
Katy is contemplating for Alex Perry a partnership or a company. What extra General Ledger accounts would have to be created for
Attachment:- Assignment.rar