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Invoice that calculates total (simple)1 Plants from Paradise December 22, 2021 Victoria BC 250 - 555-5858 Bill To: Larry Larry's Landscaping Victoria BC 250 - 888-8989 DESCRIPTION AMOUNT Plant Order $ 5,179.99 Soil Order $ 1,250.00 Delivery $ 99.98 Total $ 6,529.97 THANK YOU FOR YOUR BUSINESS! Invoice #21-080 Plants from Paradise December 20, 2021 Victoria BC 250 - 555-5858 Bill To: Larry Larry's Landscaping Victoria BC 250 - 888-8989 DESCRIPTION AMOUNT Plant Order $ 179.99 Delivery $ 49.99 Total $ 229.98 THANK YOU FOR YOUR BUSINESS! Invoice #21-078 Page 2 of 4 Plants from Paradise December 15, 2021 Victoria BC 250 - 555-5858 Bill To: Billy Jean Billy Jean's Pond Co Victoria BC 250 - 888-8999 DESCRIPTION AMOUNT Soil Order $ 250.00 Plant order $ 799.00 Total $ 1,049.00 THANK YOU FOR YOUR BUSINESS! Invoice #21-077 Page 3 of 4 Plants from Paradise December 15, 2021 Victoria BC 250 - 555-5858 Bill To: Larry Larry's Landscaping Victoria BC 250 - 888-8989 DESCRIPTION AMOUNT Plants Order $ 2,000.00 Delivery $ 49.99 Total $ 2,049.99 THANK YOU FOR YOUR BUSINESS! Invoice #21-076 Page 4 of 4 Simulation 3 Narrative: You have been hired as a Junior Accountant to work for Plants from Paradise (Plants) a garden centre in the city of Victoria, BC. Your role reports directly to Plants' Controller Miranda Cornell. Each week you are emailed a series of tasks that are Miranda has aligned to match your current accounting class schedule. Each week tasks are laid out for you to assist Miranda in both operations and accounting decision making. Miranda is hoping to help you see the broader application that accounting has on operating a business and hopes that the weekly tasks help to identify how accounting impacts operations. Plants from Paradise reports under ASPE, and has a December 31, 2021, year end. All work that you are preparing is for their financial statements dated as such. Additional Information: This week it has been raining and Miranda was able to work over the weekend to catch up on some overdue office work - there is another list of tasks waiting on your desk. Miranda is tied up on a phone call with the banker about the financing issues, you decide to crack on with your list: 1) Please record the AR transaction based on the notes provide – Appendix A (10 marks) 2) Please adjust the provided AR aging schedule - and apply our policy– Appendix B (15 marks) 3) Accounts Receivable Questions – Appendix C (10 marks) Appendix A: Accounts Receivable Transactions Tasks: 1) Record Accounts Receivable journal entries – Appendix A (10 marks) Background: Miranda provided you a stack of invoices and the following note: Hint: invoices include a GST component, please include the tax amount in aggregate entry amounts for simplicity, we will discuss GST impacts in future chapters! Please remember that we are still using the perpetual inventory system. 1) Invoice #21-076 (cost of goods sold $1,000, plants) 2) Invoice #21-077 (cost of goods sold plants $399.98, Soil $125) 3) Invoice #21-078 (cost of goods sold $89.99, plants) 4) Invoice #21-080 (cost of goods sold $625 soil, $2,500 plants) 5) Received payment for invoice #21-076 in cash, on December 30, 2021 Relevant Accounts: 1000 Cash 3010 Sales Revenue – Soil 1010 Accounts Receivable 3020 Sales Revenue – Delivery 1015 Allowance for Doubtful Accounts 4000 Accounts Payable 1020 Interest Receivable 5000 Cost of Goods Sold 1030 Inventory - Plants 5010 Sales Discounts Expense 1040 Inventory - Soil 5040 Bad Debt Expense 3000 Sales Revenue – Plants 5050 Salaries Expense Journal Entry Template: note – please record each transaction separately Entry # Date Description Account Number Account Name Debit or Credit Amount Appendix B: Accounts Receivable Tasks: 1) Please adjust the provided AR aging schedule - and apply our policy– Appendix B (15 marks) Note from Miranda: Based on the above recorded transactions, please update the previous months aged accounts receivable schedule. Then please apply the company’s policy, which main points are noted below. Please use the provided templates. Policy notes: 1) No individual customer will have an account balance that exceeds $10,000 2) We will write off accounts that are 120+ overdue 3) We notify customers after 90 days that their account is not in good standing Using the following template, please update in the blank version below: (8 marks) Plants From Paradise Aged Receivables Listing November 30, 2021 Account # Name<30 days="" 30="" -="" 60="" days="" 60="" –="" 90="" days="">90 days 120+ days Total Balance 150 - 100 Larry's Landscaping $2,300 $2,300 250 - 100 Billy Jean’s Ponds $0 350 - 100 Harry’s Hedges $1,500 $1,500 450 - 100 Big Berry Corp $8,750 $8,750 Total 2,300 $8,750 1,500 12,550 Apply the policy: (7 marks) 1) For any account that exceeds (at any point) $10,000 please flag for my review (1 mark) 2) Prepare any journal entries required for accounts that are to be written off, please note that Plants from Paradise has an Allowance for Doubtful accounts account balance of $2,000. (3 marks) Entry # Date Description Account Name Debit or Credit Amount 3) For all accounts that are greater than 90 days, please identify them, and draft a quick (3-4 sentence) email template that communicates for each overdue account (4 marks) Appendix C: Accounts Receivable Questions Tasks: 1) Respond to Accounts Receivable Questions (10 marks) Miranda had the following accounts Receivable questions: 1) Please define Factoring for me, is this something we should consider? (2 marks) 2) What other considerations should we make beyond the cost of Factoring our receivables? (2 marks) 3) If we have a good working relationship with customers, should we be flexible on our policies? Why/why not? (2 marks) 4) If last years accounts receivable balance was $15,000, and our current net credit sales are projecting to be $35,000 what is our Accounts Receivable Turnover Ratio? (2 marks) 5) Can you please analyze our Accounts Receivable Turnover Ratio compared to standard benchmarks? (2 marks)