7. Reconciling the GST control accounts is different for accrual based accounting and cash accounting. When reconciling the GST control accounts, with what would outstanding GST be reconciled in each case?
7. Reconciling the GST control accounts is different for accrual based accounting and cash accounting. When reconciling the GST control accounts, with what would outstanding GST be reconciled in each case?
Related questions
Practical Completion Point 1
Minnie Armim runs a business Min Armim Wasteage that specialises in energy saving products and advice. She has contacted you for some assistance in setting up a new accounting system. Minnie has managed to collect enough information to create a chart of accounts for you to work from.
This completion point comprises two tasks. Setting up a new system by completing an opening entry and any other relevant journal entries then posting these appropriately; and entering a set of transactions into the general journal and then recording these in the relevant ledgers. After completing these task you will need to review your work and submit.
Task 1
You have been provided with an Excel File which contains the General Journal and Ledger Accounts. The necessary accounts as well as blank accounts to be used if needed have been included. You will need to complete this task by entering the relevant information into the excel spreadsheet provided.
Enter the information below from the chart of accounts and schedules in order to set up Richardâs new system as an Opening Entry into General Journal and post the relevant information to the General Ledger Accounts provided in the excel file.
| Min Armim Wasteage - Chart of Accounts as at 1 July 2017 | ||
| 103 | Petty Cash | 250.00 |
| 105 | Bank | 3,860.00 |
| 107 | Accounts Receivable Control | 15,038.00 |
| 109 | Allowance for Bad and Doubtful Debts | 462.00 |
| 111 | Inventory on Hand | 8,208.00 |
| 113 | Stationery on Hand | 130.00 |
| 115 | Prepaid Insurance | 1,800.00 |
| 116 | Prepaid Rent | 10,000.00 |
| 140 | Premises | 140,000.00 |
| 150 | Vehicle | 23,000.00 |
| 151 | Acc. Depreciation âVehicle | 229.00 |
| 160 | Equipment | 6,400.00 |
| 161 | Accumulated Depreciation â Equip | 1,460.00 |
| 199 | GST Receivable | 1,000.00 |
| 207 | Accounts Payable Control | 5,687.00 |
| 205 | Wages Expense Payable | 862.00 |
| 210 | Accrued Telephone Expense | 481.00 |
| 220 | Office Supplies Owing | 186.00 |
| 299 | GST Payable | 1,950.00 |
| 250 | Big 4 Bank Mortgage Loan (5-year) | 123,000.00 |
| 303 | Capital â Minnie Armim | 75,369.00 |
Additional Notes
Schedule of Accounts Receivable
as at 1 July 2017
Acc. No.
10701 Unplugged Limited 660
10703 Vin Walker 1,795
10705 The Charity Stores 480
10707 Developing Naturally 6,111
10709 Dental Services SA 2,552
10711 Hotels United 3,440
15,038
Schedule of Accounts Payable
as at 1 July 2017
20701 Get Connected Limited 4,250
20703 Reduce, Reuse, Get Rich 568
20705 Flooded Industries 869
5,687
You will need to enter this information into the appropriate subsidiary ledger accounts.
Task 2
Using the excel file you have already been working on, enter the transactions below into the General Journal and then update the Ledger accounts as required.
Transactions
July 1 Sold 40 Energy Saving light globes on credit to Unplugged Ltd for $440 (including GST).
July 2 Received a cheque for $575 from Vin Walker as part payment of their account.
July 5 Issued Cheque number 718 to Flooded Industries. The cheque amount was $782.10 and a discount of $86.9 (including GST of $7.90) was received for early payment.
July 8 Purchased 200 metres of premium low voltage cabling from Get Connected for $4 per metre, plus a total freight charge of $50 and total GST of $85.
July 12 Received $450 cash (net of GST) from Ms Elvia Marks for a full house inspection and energy usage report.
July 13 Purchased 1000 Energy Saving light globes for $3 each from Get Connected Ltd. The delivery charge was $100. All amounts are net of GST. Their invoice No: 726.
July 15 Cash Sale of 12 Energy Saving light globes to Ms Christa Heathers for $10 each (net of GST)
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. |
Required:
1. Record the transactions in the companyâs general journal. Use daysin any interest accrual calculations, not months. Round all resultsto the nearest whole dollar.
The following transactions of Tech Source of Boston,Massachusetts, occurred during 2013 and 2014. The companyâsyear-end is December 31.
2013
Mar.3 â Purchased a machine for $66,000 plus 5% GST, signing asix-month, 3% note-payable.
Mar. 31 â Recorded the monthâs sales of $134,500, one-quarterfor cash, and three-quarters on credit. All sales amounts aresubject to 5% GST, to be calculated on the sales of $134,500.
Apr. 7 â Paid Marchâs GST to the Receiver General
May. 31 â Borrowed $75,000 with a 5% note payable that calls forannual installment payments of $15,000 principal plus interest.
Sept 3. â Paid the six-month, 3% note at maturity
Sept 30. â Purchased inventory at a cost of $25,000 plus GST,signing a 5%, six-month note payable for that amount.
Dec. 31 â Accrued warranty expense, which is estimated at 3% ofannual sales of $1,445,000
Dec. 31 -Accrued interest on all outstanding notes payable. Makea separate interest accrual entry for each note payable.
2014
Mar. 31 â Paid off the 5% inventory note, plus interest, atmaturity.
May â Paid the first installment and interest for one year onthe long-term note payable.
General Journal | |||||
DATE | ACCOUNT TITLES AND EXPLANATIONS | POST. REF. | DEBIT | CREDIT | |
General Journal | |||||
DATE | ACCOUNT TITLES AND EXPLANATIONS | POST. REF. | DEBIT | CREDIT | |
