ACC M115 Lecture Notes - Lecture 19: General Ledger, Income Statement, Financial Statement
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Record the following transactions in the appropriate specialjournals or general journal for the month of June. Record and postall transactions in accordance with accounting procedures. Once youhave recorded all of the transactions, total the columns in eachjournal and cross check that they balance before submitting forassessment.
(Note: In each journal, enter transactions in order oftransaction date and then in the order they appear in thetransaction list below. For example, enter transactions from 12June before transactions from 14 June and then enter the 12 Junetransactions in the order they appear in the transaction listbelow. If an account total or balance returns to zero, enter 0.00in the required field, otherwise leave the fieldblank.)
June 1 | Cash sale #3357 for hire of equipment, total value $315.90,including GST. The customer paid by EFTPOS which went directly intoour bank account. | |
June 4 | Received the telephone bill (invoice #289467) from Telstra for$376.42, including GST. This was paid immediately with cheque#1194. | |
June 5 | Paid Mitchell Jordan $960.00 with cheque #1195, the amountowing to him for invoice #1753. | |
June 6 | Receive 30 new helmets (hire equipment) costing $2,620.00including GST, from Spida Headgear together with their invoice#23116 for $2,730.00 which included a freight charge of $110.00.Terms on this invoice are 5/10, N30 and prices includeGST. | |
June 7 | Invoiced (invoice #3358) Snow Ski Holidays for the hire ofequipment ($1,138.00) and lessons ($1,980.00). Total invoice value$3,118.00 including GST and terms are N30. | |
June 10 | Received and banked a cheque for $1,320.00 from Snow SkiHolidays. | |
June 12 | Purchased postage stamps ($60.00 including GST) from AustraliaPost. These were paid for with cash from petty cash. | |
June 12 | Sent cheque #1196 for $2,400.00 to Skicentral NZ Wholesalers inpayment of their invoice #13467. | |
June 12 | The owner, Kurt Rendell, cashed cheque #1197 for $3,008.00 forhis own use. | |
June 14 | Paid Spida Headgear $2,593.50 with cheque #1198. This was inpayment of their invoice #23116 less prompt paymentdiscount. | |
June 15 | Purchased coffee and biscuits (staff amenities) for $26.85 fromthe Falls Creek Deli. This amount includes only $0.72 GST as someof the items are GST free. These were paid for with cash from pettycash. | |
June 17 | Sold ex hire equipment to Jack Small for $657.00 including GST.His cheque for this amount was banked today. This equipmentoriginally cost $819.00, but was written down to $315.00 at thedate of sale. Calculate and journalise the profit on thesale. | |
June 17 | Received a bill (invoice #2234) from Mitchell Jordan for$1,370.00 including GST for ski instruction provided. His terms areN7. | |
June 18 | Cash sale (invoice #3359) for hire of equipment $281.60 andlessons $1,320.00. The customer paid the $1,601.60 including GST byEFTPOS. | |
June 19 | Invoiced (invoice #3360) Snowlink for hire of equipment$2,217.60 and lessons $1,188.00. Total value of invoice $3,405.60including GST with terms of 10/10, N30. | |
June 20 | Purchase fuel for the motor vehicle costing $88.00 includingGST. This was paid for with cheque #1199. | |
June 24 | Received and banked a cheque for $2,160.00 from Mountain LakeResort. | |
June 24 | Cashed cheque #1200 for $86.85 to reimburse pettycash. | |
June 24 | Paid Davidâs Repair Shop with cheque #1201 for repairs to skiequipment costing $352.00 including GST. | |
June 25 | Sent cheque #1202 for $432.00 to Australian Super. This was inpayment of the amount of superannuation owing for May. | |
June 26 | Credit sale to Alpine Sports (invoice #3361) for hire ofequipment $792.00 and lessons $1,320.00. Prices include GST andterms are N30. | |
June 26 | Received new hire equipment ($1,650.00) from The South Facetogether with their invoice #9457 for $1,705.00 including GST,which included a freight charge of $55.00. Terms N30. | |
June 27 | Received adjustment note #9462 from The South Face for $165.00including GST. This was for the return of one of the items of newhire equipment on their invoice #9457. | |
June 28 | Paid Valley Cleaners for cleaning services provided in June$110.00 including GST, by cheque #1203. | |
June 28 | Cashed cheque #1204 for $4,060.00 for wages for the month.Gross wages are $4,600.00 and PAYG Withholding deducted was$540.00. | |
June 28 | Received and banked a cheque for $3,065.04 from Snowlink. |
Wallyâs Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: |
Cash | $ | 21,620 | Unearned Revenue (30 units) | $ | 5,350 | ||
Accounts Receivable | $ | 12,650 | Accounts Payable (Jan Rent) | $ | 3,300 | ||
Allowance for Doubtful Accounts | $ | (1,900) | Notes Payable | $ | 16,000 | ||
Inventory (35 units) | $ | 2,800 | Contributed Capital | $ | 7,000 | ||
Retained Earnings â Feb 1, 2012 | $ | 3,520 | |||||
⢠| WWC establishes a policy that it will sell inventory at $180 per unit. |
⢠| In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue. |
⢠| WWCâs February 1 inventory balance consisted of 35 units at a total cost of $2,800. |
⢠| WWCâs note payable accrues interest at a 12% annual rate. |
⢠| WWC will use the FIFO inventory method and record COGS on a perpetual basis. |
February Transactions | |
02/01 | Included in WWCâs February 1 Accounts Receivable balance is a $1,400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012. |
02/02 | WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense. |
02/05 | An additional 180 units of inventory are purchased on account by WWC for $13,500 â terms 2/15, n30. |
02/05 | WWC paid Federal Express $360 to have the 180 units of inventory delivered overnight. Delivery occurred on 02/06. |
02/10 | Sales of 150 units of inventory occurred during the period of 02/07 â 02/10. The sales terms are 2/10, net 30. |
02/15 | The 30 units that were paid for in advance and recorded in January are delivered to the customer. |
02/15 | 25 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase. |
02/16 | WWC pays the first 2 weeks wages to the employees. The total paid is $2,800. |
02/17 | Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs. |
02/18 | Wrote off a customerâs account in the amount of $2,000. |
02/19 | $6,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. |
02/19 | Collected $10,000 of customersâ Accounts Receivable. Of the $10,000, the discount was taken by customers on $8,000 of account balances; therefore WWC received less than $10,000. |
02/26 | WWC recovered $600 cash from the customer whose account had previously been written off (see 02/18). |
02/27 | A $950 utility bill for February arrived. It is due on March 15 and will be paid then. |
02/28 | WWC declared and paid a $950 cash dividend. |
Adjusting Entries: |
02/29 | Record the $2,800 employee salary that is owed but will be paid March 1. |
02/29 | WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts. |
02/29 | Record February interest expense accrued on the note payable. |
02/29 | Record one monthâs interest earned Kit Katâs note (see 02/01). |
1-a. | Prepare all February journal entries and adjusting entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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