100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) Accumulated depreciation - shop equipment 200 Accounts payable 210 PAYG withholding payable 220 Superannuation payable 230 Bank loan 300 Capital 310 Drawings 320 Profit or loss summary 400 Sales revenue 410 Sales returns and allowances 420 Discount received 500 Cost of sales 600 Advertising expense 610 Depreciation expense 620 Discount allowed 630 Electricity expense 640 Insurance expense 650 Interest expense 660 Postage and stationery expense Superannuation expense 680 Telephone expense 690 Wages expense Skate 'n' Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader. The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employee's wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis. The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting. Accounting records The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier. Chart of accounts The chart of accounts for Skate 'n' Surf contains the accounts and account numbers below. 12 13 14 Transactions June 1 The owner opened a bank account for the business with a deposit of $33,000. This is capital provided by him. 1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $33,000 and computer equipment for the shop from Computer Wizards for $6,000. These were paid for with a loan of $36,500 from the bank and cheque for $2,500 from the business bank account. The bank loan is repayable over 4 years. 2 Paid $4,080 for a 1-year insurance policy covering fire, theft, and public liability. 2 Paid $1,130 to Local Newspapers for advertising for the shop for the month. 5 Purchased inventory (skateboards and protective gear) from Excitement plus for $29,000 on terms on net 30. 7 Purchased surfboards and wetsuits from Surf Imports for $19,000 on terms of 10/10, n/30. 8 Credit sale to Serious Fun of skateboards and protective gear for $5,000 (cost of sales $2,800). This customer was given terms of 5/10, n/30. 8 Cash sale of a skateboard and protective gear for $540 (cost of sales $220). 11 Cash purchase of postage stamps and stationery from Australia Post for $120. 12 Credit sale to Surfing World of various inventory items for $7,930 (cost of sales $4,200). Terms net 30. Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $160. Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. Paid Surf Imports the amount owing to them less the prompt payment discount. 17 Credit sale to Academy Diving School of 16 wetsuits at a discounted price of $370 each on terms of net 15. Cost of sales $5,120. 23 Paid Excitement Plus $3,900 of the amount owing to them. 24 Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $370 each that was not the size they required. The cost of the wetsuit to us was $320 and it was put back into inventory. 24 Purchased wetsuits from Surf Imports for $9,000 on terms of 10/10, n/30. 25 Credit sale to Serious Fun of skateboards for $8,000 (cost of sales $3,900). Terms 5/10, n/30. 27 Received and banked a cheque from Academy Diving School for the amount owing by them. 30 A repayment of $1,100 was made on the bank loan. 30 The owner cashed a cheque for $575 to pay wages to Scott Walker the sales assistant of $600 less PAYG Withholding of $25. The end of month adjustments are below. a. Depreciation on shop equipment for the month is 10% p.a. prime cost (straight line). b. One-twelfth of the insurance expired. c. Superannuation payable for the month is 10% of the gross wages paid. d. Interest charged on the bank loan for the month was $152. The transactions above have been journalised and posted. The statement or profit or loss for June is below. Skate 'n' Surf Statement of profit or loss for the period 1 June to 30 June 20xx Revenue Sales revenue Sales revenue 27,390 Less: Sales returns and allowances 370 Net sales revenue 27,020 Less: Cost of sales 15,920 Gross profit 11,100 Other revenue: Discount received 1,900 13,000 Expenses Advertising expense 1,130 Depreciation expense 325 Discount allowed 250 Insurance expense 340 Interest expense 152 Postage and stationery expense 120 Superannuation exepnse 57 Wages expense 600 Total expenses 2,974 Net profit/(loss) $10,026 20xx June 30 V Sales revenue 27,390 (Discount received 1,900 29,290 Profit or loss summary (To close revenue accounts) 30 V Profit or loss summary 19,264 Advertising expense 1,130 Depreciation expense 325 Discount allowed 250 Insurance expense 340 Interest expense 152 Postage and stationery 120 Superannuation expens 57 Wages expense 600 Sales returns and allow 370 Cost of sales 15,920 (To close expense accounts) 30 V Profit or loss summary 10,026 10,026 Capital (To close profit to capital account) Post end-of-year closing entries and complete the closing process in the general ledger. (Note: Leave blank any answer fields that do not require an answer.) No. 100 Debit Credit Cash at bank Date Details June 1 Capital 8 Sales revenue 13 Accounts receivable 27 Accounts receivable Date 33,000 June 540 4,750 5,550 Details 1 Shop equipment (cost) 2 Prepaid insurance 2 Advertising expense 11 Postage and stationery 14 Accounts payable 23 Accounts payable 2,500 4,080 1,130 120 17,100 3,900 30 Bank loan 1,100 30 Wages expense 575 $ July July NO. 110 Debit Credit Accounts receivable Date Details June 8 Sales revenue 12 Sales revenue 17 Sales revenue 25 Sales revenue Date 5,000 June 7,930 5,920 8,000 Details 13 Cash at bank 13 Discount allowed 24 Sales returns and allowances 27 Cash at bank 4,750 250 370 5,550 July July No. 120 Inventory Date June Debit Credit Details 5 Accounts payable 7 Accounts payable 24 Cost of sales 24 Accounts payable Date 29,000 June 19,000 320 9,000 Details 8 Cost of sales 8 Cost of sales 12 Accounts payable 12 Cost of sales 17 Cost of sales 25 Cost of sales 220 2,800 160 4,200 5,120 3,900 July July No. 130 Prepaid Insurance Date Details June 2 Cash at bank Debit Credit Date 4,080 June Details 30 Insurance expense 340 July July No. 171 Debit Date Details Credit Shop equipment (cost) Date Details June 1 Bank loan 1 Cash at bank 36,500 2,500 $39,000 No. 172 Accumulated deprecation - shop equipment Date Details Debit Date Details Credit June 30 Depreciation expense 325 No. 200 Debit Credit Accounts payable Date Details June 12 Inventory 14 Cash at bank 14 Discount received 23 Cash at bank Date 160 June 17,100 1,900 Details 5 Inventory 7 Inventory 24 Inventory 29,000 19,000 9,000 3,900 July July No. 210 PAYG withholding payable Date Details Debit Credit Date June Details 30 Wages expense 25 No. 220 Superannuation payable Date Details Debit Credit Date June Details 30 Superannuation expense 57 No. 230 Bank loan Date June Debit Credit Details 30 Cash at bank Date 1,100 June Details 1 Shop equipment (cost) 36,500 30 Interest expense 152 July July No. 300 Capital Date Details Debit Date Details Credit June June 1 Cash at bank 33,000 No. 310 Drawings Date Details Debit Date Details Credit No. 320 Profit or loss summary Date Details Debit Date Details Credit June June No. 400 Sales revenue Date Details Debit Date Details Credit June June 8 Cash at bank 540 5,000 7,930 8 Accounts receivable 12 Accounts receivable 17 Accounts receivable 25 Accounts receivable 5,920 8,000 No. 410 Sales returns and allowances Date Details Debit Date Details Credit June 24 Accounts receivable 370 June No. 420 Discount received Date Details Debit Date Details Credit June June 14 Accounts payable 1,900 No. 500 Debit Credit Date 220 June Cost of sales Date Details June 8 Inventory 8 Inventory 12 Inventory Details 24 Inventory 320 2,800 4,200 17 Inventory 5,120 25 Inventory 3,900 No. 600 Advertising expense Date Details June 2 Cash at bank Debit Date Details Credit 1,130 June No. 610 Depreciation expense Date Details Debit Date Details Credit June 30 Accumulated depreciation - shop equipment 325 June NO.OZU Date Details Debit Date Details Credit June 13 Accounts receivable 250 June No. 630 Electricity expense Date Details Debit Date Details Credit No. 640 Insurance expense Date Details June 30 Prepaid insurance Debit Date Details Credit 340 June No. 650 Interest expense Date Details June 30 Bank loan Debit Date Details Credit 152 June No. 660 Postage and stationery expense Date Details June 11 Cash at bank Debit Date Details Credit 120 June No. 670 Superannuation expense Date Details Debit Date Details Credit June 30 Superannuation payable 57 June No. 680 Telephone expense Date Details Debit Date Details Credit No. 690 Debit Date Details Credit Wages expense Date Details June 30 Cash at bank 30 PAYG withholding payable 575 June 25