1) Record all transactions for week 3 in the appropriate journals.

Please note that special journals must be used where applicable. Any transaction that cannot be recorded in a special journal must be recorded in the general journal.

2) Post journal entries to the appropriate ledger accounts in accordance with company accounting policies and procedures.

Note that the relevant totals from the special journals will be posted to the general ledger accounts at the end of the month. You will enter this before preparing the Bank Reconciliation Statement.

3) Update inventory cards daily.

The transactions for week 3 are listed below:

week 3
Date	Description of the transaction
sixteen	Bought 15 Zii game consoles from Big Telco for $1,384 each, terms 2/10, n/30.
17	Sold 3 Mieca camera lenses to Radio Hut for $832 each, invoice #764.
17	Hypertronics paid $3,600 in partial payment on your account.
18	Bought 10 BlueBerry phones from JCN Electrical for $536 each, net terms 30.
18	Paid sales staff wages of $12,707 for the week up to and including yesterday, Check No. 320.
19	You made a cash sale of 22 DK800 desktop computers at a list price of $2,112 each. A commercial discount of 25% is applied.
19	You received a purchase order from Hypertronics. You created a corresponding sales order to deliver 31 Mieca camera lenses to this customer for $832 each, invoice #766.
20	Turbo Tech returned 2 Swish phones that originally sold for $856 each on June 11. These items are $488 each and were not defective or damaged. Issued a Memorandum of Credit for $1,712.

Accounting Policies:

Business Operations: Digital Village is established as a Miami-based private unlisted corporation with Leonardo Bartos as the sole shareholder. The business derives its main source of income from retail sales of electronics.

To help run the business, The Digital Village rents out a small office space. Please note that the company must pay the rent for this premises in advance.

The electricity and water expenses incurred during the month correspond to the operation of the office. Additional expenses include an insurance policy to protect equipment in the office in case of theft or fire.

All costs associated with the office are classified as general and administrative expenses.

Leonardo is the only full-time employee and his role is to handle all administrative tasks. Leonardo's salary is paid once at the end of each month. All other employees are part-time sales staff. Sales staff receive their salary on a weekly basis.

b. Accounting cycle: The company adopts a monthly accounting cycle.

C. Purchases: Purchases are recorded when the company receives the goods. All purchased items are received the same day they are posted to the transaction list, except for purchase orders that are received at a later date. Please note that the company uses the gross method to record purchases and receives trade discounts from some vendors.

d. Revenue recognition: The company recognizes revenue when goods sold are delivered to customers. All items sold are delivered the same day it is recorded in the transaction list, except for sales orders, which are delivered at a later date agreed with the customer. Please note that the company uses the gross method to record sales and sometimes grants trade discounts to customers. Past experience has shown that offering early payment discounts does not increase the likelihood that accounts receivable will be paid on time. Therefore, early bill discounts are not normally offered to credit customers, except in exceptional circumstances.

e. Sales returns : In order for the business to easily track the level of sales returns relative to overall sales, all sales returns are recorded using a contra-revenue account (sales returns and discounts) instead of recording directly on the account. sales revenue account.

F. Sales Tax: Leonardo has advised you to ignore the effect of sales tax. [ASIDES: This is an assumption to make the practice set easier to complete. In the real world, sales tax cannot be ignored.]

g. Cash: The business accepts cash and checks and uses checks to pay most of its expenses. On the day the checks are received, Leonardo deposits them in the bank. It may take several days for the bank to clear the checks. The company has its checking account at BitiBank.

H. Inventories: the company uses the perpetual inventory system and applies the FIFO method to allocate costs to inventory and cost of goods sold. Note that the company maintains a set of inventory cards with various line pairs to track changes in inventory. On each inventory card under the Balance column, items with different unit costs are listed on separate lines with previously purchased items listed first on the pair of lines provided.

i. Prepayments: It is the company's policy to record prepayments, including office supplies, as assets. At the end of the month, adjustments are made to the corresponding accounts to recognize the expense during the accounting period.

j. Property, plant and equipment: Items of property, plant and equipment are depreciated over their estimated useful lives using the straight-line method to calculate the depreciation charge. Depreciation is allocated monthly, and the monthly depreciation charge is calculated as the annual depreciation expense divided by the number of months in a year.

k. Long-Term Liabilities: The company obtained an interest-only loan from Earth Bank on June 1, 2017 at a simple interest rate of 6% per year. The first interest payment is due at the end of August 2017 and the principal of the loan is due on June 1, 2020.