Josue Moura_S40061395_Report on Financial Activity_Ass01.docx

For example if youre a builder and have sent an

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For example, if you're a builder and have sent an invoice for a project you've completed, you record the sale in your books even though you haven't received payment yet. This way of accounting shows the amounts you owe to people and the amounts owing to you. When reporting GST(Goods and services tax), the ATO(Australian Taxation Office) has restrictions on which accounting method an organisation can use. This is generally determined by the turnover (revenue)of an organisation. Any organisation with a turnover of more than $2million a year is required to use the accrual method to report and pay GST. Utilising the incorrect method can result in serious financial implications for an organisation and can also attract fines from the ATO. b. Best choice for an organisation with a turnover of $1 million per annum Any methods can be chosen for the business turnover less than $2m. Question 2 The calculation of the cost of the machine Purchase price: $35,600 Freight cost: $1,200 Installation cost: $2,100 Total Cost: $38,900 (adding up the amounts) Note : Initial electricity account should not be included as it is not the part of the machine cost. Question 3 Grace bought the following assets on 1 July 2015: Depreciation formula: Cost – Estimated Residual Value/ Lifetime Question 4 The values on sheet show the following assets and liabilities.
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Asset or Liabilities Classification Valuation Method Vehicles Fixed Asset Depreciation useful life and purchase price Land Fixed Asset Value measured by the bank Inventory Current Asset Market price or cost price whichever is the lowest Mortgage Non Current Liability Remaining amount of the loan Accounts Payable Current Liability Remaining value to be pay (Bill from the supplier) Question 5 The following sheet show the trial balance at 30 June 2015 of Blacktown Tyres.
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