BUS285: Ling & Jessop is a retail outlet for antique books that provides a book repair service: Accounting Assignment, MU, Singapore

Question 3

Ling & Jessop is a retail outlet for antique books that provides a book repair service and also sells rare music manuscripts. Ling & Jessop is operated by Cam Ling and Tim Jessop. Mildred Mildew is a repair specialist who works for Ling & Jessop on a fixed salary.

Revenues are generated through the sale of antique books (approximately 75% of total revenues), rare manuscripts (10%) and the repair of old books brought to the store (15%). Book sales are made on both a credit and a cash basis. Customers receive prenumbered sales invoices.

Credit terms are always net/30 days. All manuscript sales and repair work are cash only. Inventory is purchased on account from various antique book and manuscript dealers. Virtually all suppliers offer cash discounts for prompt payment, and it is company policy to take all discounts. All cash payments are made by EFT and include payments to suppliers, to transport companies for freight on inventory purchases, and to newspapers, radio and TV stations for
advertising. All invoices for advertising are paid as received. Cam and Tim each make a monthly drawing in cash for personal living expenses. The salaried repair woman is paid fortnightly.

Ling & Jessop currently has a manual accounting system. Cam Ling is concerned about the inefficiencies in journalising and posting transactions with the manual system. Two additional bookkeepers were employed a month ago, but the inefficiencies have continued at an even higher rate. However, Tim is old-fashioned and refuses to install an electronic accounting system.

Required
Answer the following.
(a) Identify the special journals that Ling & Jessop should have in its manual system. List the column headings appropriate for each of the special journals.
(b) What control and subsidiary accounts should be included in Ling & Jessop’s manual system? Why?
(c) Explain why the additional personnel did not help.
(d) What changes should be made to improve the efficiency of the accounting system?

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