Scenario

Joseph Hope runs a mobile cleaning service in Lancashire called Hopes Cleaning Services. He operates a six-day week and provides a cleaning service to both private customers who pay by cash and corporate customers who have credit accounts.

He usually allows 30 days credit to his corporate customers.

You are Joseph’s bookkeeper and you write up Josephs Books on a weekly basis.

The information that follows is for the month of April 2011. Joseph’s year-end is 31st March.

The Balances in his ledger on 1 April 2011 were:

Capital £15090
Motor Vehicle £9650
Equipment £5500
Stock of Materials £700
Bank £3400
Debtors:
Sands Hotel £570
Prince Lodge £820
Creditors:
Steeple Warehouse £600
Bank Loan £4600
VAT £350 Cr

TASK 1

Refer to the ledger accounts set out in this booklet and post the opening entries as at 1 April 2011.

TASK 2

From the data below prepare the sales invoice to Sands Hotel; the charges are subject to VAT at 20 %.

Use the pro-forma invoice shown below.

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Sands Hotel, Talbot Road, Blackpool FY1 2PK.
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Order No: 1012
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36 hours cleaning @ £15 per hour, 8 boxes of ultra white washing powder @ £12.50 each and 5 bottles of bleach @ £2.30 per bottle.
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A trade discount of 5% is given with a further 2% settlement discount if payment is made within 7 days.
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Date: 2nd April. Invoice No: 2103

| | Hopes Cleaning Services | | | | | | Pleasant Gardens | | | | | | Blackpool | | | | | | Lancashire | | | | | | FY21 1TP | | | | | | | | | VAT Reg No: | | | www.hopecleaning.co.uk | | | 395 7832 62 | | | Email: joseph@bt.connect.com | | | | | | | Mobile: 07736 227145 | | | Date: 2nd January 2011 | | | | | | Invoice No: 2103 | To: Sands Hotel | | | | | Your Order No: 1012 | Talbot Road | | | | | | | Blackpool | | | | | | | FY1 2PK | | | | | | | | | | | | | | Goods Supplied: | | | £ | | | 36 X Hourly cleaning service @£15 p.h | | | 540.00 | | | 8 X Washing Powder @ £12.50 | | | 100.00 | | | 5 X Bottle of Bleach @ £12.30 | | | 11.50 | | | | | | | | | Goods Total | | | £ 651.50 | | | Less 5% Trade Discount | | | £ 32.58 | | | Net Value | | | £ 618.92 | | | VAT @ 20% | | | £ 121.30 | | | | | | | | | | | | | | | | | Gross Invoice Total | | | | | £ 740.22 | | | | | | | | | | | | | | | | | | | | | Payment terms:Net. 30 days E & OE2% settlement discount if invoice paid within 7 days. | | | | | | | | | Proprietor: Joseph Hope | | | | | |

TASK 3

Examine the following purchase invoice and decide whether you would approve it for payment or not; and state the action you would take. Please look at the complete invoice, not just any figure work.

Blyth Warehouse Ltd
High Street
Preston
Lancashire
TG5 7EF

VAT Reg No: 714 5122 31

Date: 3 April 2011

Your Order No: 721 CV

To: Joseph Hop Hope’s Cleaning Services Pleasant Gardens Blackpool FY21 1TP

Unit Cost £
2 x 5 litres of “Bleach” £24.00 (per 5L) 48.00

8 packs of heavy duty £0.75 6.00
Cleaning pads (per pack)