Scenario

This scenario applies to all questions included in this Assessment.

You are employed as an accounts clerk for a popular local coffee shop Karl’s Café and have been asked to prepare some calculations, to be given to the Accountant by the end of the day.

The café is operated as a sole trader and Karl also sells coffee machines to other retailers. As his turnover is greater than $75,000 per year he is registered for GST on a cash basis. There is one employee, Leonardo, who works as a barista and is employed on a full time basis. He is an Australian resident and claims the tax free threshold from this job.

An extract from the café’s organisational policies and procedures is attached at Appendix A. Refer to this and the information supplied above to assist in carrying out the assessment tasks.

Task 1 – GST

a) Karl’s Coffee shop has had the following transactions during the Goods and Service Tax (GST) period of October to December 2018. 

In an Excel worksheet calculate the GST paid and the GST collected in each of the following transactions.

In your answers show your calculations.

I. Bought goods for $3,905 GST inclusive

II. Sold goods for $22,726 GST inclusive

III. Sold goods for $1,420 GST exclusive

IV. Bought goods for $6,390 GST exclusive.

b) Following on from Question 1, for the period October to December 2018, calculate the amount payable to the Australian Taxation Office in the table below:

Karl’s Cafe

Extract from POLICIES AND PROCEDURES

Personnel

Normal hours

Standard working hours for a fulltime employee are 38 hours per week. Full time employees work between 8.30am and 5.00pm with a one hour unpaid lunch break. 

Casual employees work up to 30 hours per week on any day between 8am and 9.00pm.

Overtime

Overtime will be paid to full time staff who works more than 38 hours in any week. A 30 minute unpaid meal break must be taken before commencing overtime hours on a weekday. Overtime on weekdays is paid the rate of time and a half for the first three hours then double time for any additional hours after that. Overtime at double time will be paid for all hours worked by full time employees on weekends.

Casual employees do not receive overtime rates.

Salaried employees do not receive overtime rates.

Annual Leave

Full time employees are entitled to 4 weeks paid annual leave per year. Annual Leave Loading is also paid to all employees who are entitled to Annual Leave at the rate of 17.5% of Annual Leave payable.

Casuals are not entitled to annual leave or Annual Leave Loading.

Any annual leave outstanding at the end of the year carries over to the following year.

An Application for Annual Leave is to be completed by employees prior to taking Annual Leave. This is to be submitted for approval at least 2 days prior to the first day of leave. An employee may request to have leave paid in advance for absences or more than 5 days. The authorised delegate to approve leave is as follows:

For Shop Assistants and Delivery staff:  The Manager (Joan Bosswell)

For the Manager:  The Director (John Smith)

Personal Leave

Full time employees are entitled to 2 weeks sick leave per year.

Casual employees are not entitled to sick leave.

Any sick leave not taken at the end of June each year carries over to the following year.

An absence for Personal Leave should be notified to the Approving officer by email of telephone as soon as possible once the need arises. 

An Application for Personal Leave is to be completed by employees on the day they return to work following leave. The authorised delegate to approve leave is as follows:

For Shop Assistants and Delivery staff:  The Manager (Joan Bosswell)

For the Manager:  The Director (John Smith)

Uniform Allowance

All employees other than the manager are required to wear a uniform and are entitled to a uniform allowance. Full time employees receive $20 per week uniform allowance while casual employees receive $10 per week uniform allowance. Uniform allowance is to be paid to full time employees while they are on leave; however it is only paid to casual employees in weeks that they actually work. Tax to be withheld if required by the PAYG legislation. 

Motor Vehicle Allowance

All employees who use their own vehicles for deliveries will be paid a motor vehicle allowance in accordance with the ATO rates. That is:

• number of kilometres travelled  x  applicable rate per kilometre

Tax to be withheld if required by the PAYG legislation.

Superannuation Guarantee

All employees are entitled to Superannuation Guarantee at the prescribed rate.

Payment of wages

Payment is made electronically to all employees.

Timesheets

All employees not paid on a salary basis are required to complete a timesheet on the specified form. It should indicate start and finish times, normal hours worked and any overtime worked for each day the employee worked. The timesheet should also indicate any leave claimed including the type of leave and number of hours. If an employee is claiming Annual Leave in advance they should complete a timesheet in advance for the period they will be away and submit it on the last payday before payment is required. Timesheets are to be signed and dated on the last working day each week and submitted to be checked, totalled and authorised by the Manager (Joan Bosswell). 

Finishing time on a Friday can be estimated if after 12.00pm and an adjustment to pay made the following week if needed with the Manager’s approval.

Payroll processing

Payment of wages is made weekly on a Friday by 4.00pm. The responsible officer is the Manager (Joan Bosswell).

Timesheets must be submitted to the Manager by 12.00pm on Friday for pays to be processed. 

Salaried employees are not required to submit a timesheet.  

Relevant leave applications must also be submitted by 12.00pm on Friday to be taken into account in pay processing.

The payroll officer is required to process the payroll, print and distribute payslips, and prepare payroll reports. 

Payroll enquiries

Payroll enquiries should be responded to by the responsible officer within 48 hours and in accordance with relevant privacy legislation.

Payroll records

All payroll records are to be maintained in accordance with legislative requirements and confidentiality respected at all times.

Computer access to payroll records is to be limited to payroll staff and the Manager through the use of passwords which should be changed regularly. 

Paper based records are to be stored in a locked filing cabinet in the Manager’s office and the key left with the manager. This includes:

- Employment Contracts, Employment Declarations, Employee Details forms to be filed in each employees Permanent file

- timesheets which are to be filed in a folder for each employee by date order immediately after processing

- leave application forms to be filed in each employee’s Annual file

- other employee documents to be filed in employee’s Annual files

- Weekly , monthly and annual payroll report to be filed in the Sunshine Florist Payroll file

Fixed Assets

Cost

All fixed assets are to be recorded in the accounts at their historical cost.

Depreciation

Annual depreciation is to be calculation using the straight-line basis.