Chocolate Delights is a growing 'Dessert Shop' operating in New Zealand. They specialise in producing chocolate desserts for the local communities in Palmerston North. Paul Henderson, the owner, has operated the shop from his personal name as a sole trader for many years. In the past, Paul had inherited patented recipes for desserts. This patent stops anyone from producing the exact same dessert, which increases the amount of goodwill for the business. He was halfway through the 2022 financial year and was nearing the GST turnover threshold. Before he registered for GST, his accountant suggested creating a new company that would shift his GST and other liability obligations from his personal debt to a company debt. On the 1. September 2021, based on the accountants advice, Paul decided to create a company called Chocolate Delights Ltd. The company is currently registered for six (6) monthly GST filing on a Payments Basis, and files financial statements on the 31 March. The company's IRD number is 111-111-111. I Events during Summer Paul had employed a barista to offer warm and cold beverages during the summer seasons. He was anxious about the idea as he marketed the business on just desserts. After doing some market research, he found that beverages could be a great side income to compliment the deserts. At the end of the first season, sales doubled compared to before. Paul was so impressed with the results that he wanted to establish new operation later in the year with a similar business model. | Events during June 2022 In the three (3) months following March, Chocolate Delights Ltd encountered significant growth in the warm and cold beverage market. Paul has already hired two additional baristas to help with demand, while the other crew continues creating desserts. His assumption was correct as people were buying both beverages and desserts. Due to the growth, Paul decided to expand operations into Lower Hutt on the 1st of May. Paul managed to sub-lease a big restaurant and moved there temporary to build up operations. Paul plans to use a similar business model, and this business will have access to the same patented recipes. I The Issue Despite all this growth, on 20 June 2022, Paul requires additional funding to maintain operations for his new shop. However, the local banks in the Greater Wellington Region have requested to see last year's Special Purpose Financial Reports with an inclusion of a Statement of Cash Flows. Your job will be to prepare these financial statements for Chocolate Delights Ltd as of 31 Marc Footer (Default Page Style) +/nInstructions This will cover the compilation of Special Purpose Financial Reports using Xero and Excel. Paul has provided you with a Trial Balance from a specialised POS/Accounting system as at 31 March. You are required to import this Trial Balance into Xero and prepare balance day adjustments to generate the Special Purpose Financial Reports. I Adjustments required: More information will be available in the following chapter. Here is the summary of adjustments you will need to make: Received Aged Accounts Receivable and Payables Reports as at 31 March to record into Xero. No Debtors and Creditors values are recorded in the Trial Balance. The Annual Loan Summary for the Motor Vehicle Finance is provided to prepare your Loan Adjustments. Received details regarding Payroll and GST to help you record any adjustments into Xero. The stocktake for ingredients at year-end was $5,650.00. Chocolate Delights is running a periodic inventory system. A closing inventory journal is required. Received details on a couple of accruals and deferrals and extra information of any bad and doubtful debts. You have obtained the list of assets currently being used or disposed of in the business. Use this information and Xero's inbuild asset register to prepare the adjustments for non-current assets. • During May 2022, Paul received the opportunity to refit all the kitchen appliances for $10,000, worth $25,000.00 due to a competition he won! Conduct an impairment review of the older kitchen appliances. After providing warm and cold refreshments to customers, Paul had a disagreement with a local barista across the road. They are currently suing for damages for the loss of goodwill of $50,000. The lawyer stated that there is a 50% chance of Paul losing this case in light of current information. A provision is required for 50% of the damages. Using your taxation understanding, prepare the tax calculation and record/n1 Related Parties Apart from the Current Account, Paul indicated a few related party transactions he would like to be fully disclosed in the notes for the financial statements: (Note: these have already been accounted for in the trial balance) 1. Paul reimbursed the company the cost price totalling $500.00 excluding GST for treats used personally 2. Paul has exclusive deals from a local store, and they weren't very impressed with the new company formation. So instead, he was reimbursed by the company for purchases of $20,000.00 excluding GST of supplies under his personal name.

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chocolate delights is a growing dessert shop operating in new zealand

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Chocolate Delights is a growing 'Dessert Shop' operating in New Zealand. They specialise in producing chocolate desserts for the local communities in Palmerston North. Paul Henderson, the owner, has operated the shop from his personal name as a sole trader for many years. In the past, Paul had inherited patented recipe