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(Note: Although this question is based on the Skate n Surf business the accounts, amounts and transactions involved may differ between questions. Please read each question separately. Totals and balance B/Ds and C/Ds for ledgers accounts are not required for this question.)

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 employees 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. The accounts receivable and accounts payable subsidiary ledgers are provided for information only, you are not required to post to these ledgers.

Chart of accounts The chart of accounts for Skate n Surf contains the accounts and account numbers below.

100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) 172 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 670 Superannuation expense 680 Telephone expense 690 Wages expense

Transactions June 1 The owner opened a bank account for the business with a deposit of $30,900. This is capital provided by him. 1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $28,200 and computer equipment for the shop from Computer Wizards for $3,600. These were paid for with a loan of $28,200 from the bank and cheque for $3,600 from the business bank account. The bank loan is repayable over 3 years. 2 Purchased inventory (skateboards and protective gear) from Excitement Plus for $24,100 on terms on net 30. 5 Cash purchase of stationery from Officeworks for $350. 7 Purchased surfboards and wetsuits from Surf Imports for $19,500 on terms of 10/10, n/30. 9 Paid Surf Imports the amount owing to them less the prompt payment discount. 11 Paid $4,000 for a 1-year insurance policy covering fire, theft, and public liability. 12 Paid $1,530 to Local Newspapers for advertising for the shop for the month. 13 Credit sale to Serious Fun of skateboards and protective gear for $4,600 (cost of sales $2,200). This customer was given terms of 5/10, n/30. 14 Credit sale to Surfing World of various inventory items for $7,900 (cost of sales $4,400). Terms net 30. 17 Credit sale to Academy Diving School of 15 wetsuits at a discounted price of $275 each on terms of net 15. Cost of sales $3,100. 18 Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $190. 18 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. 19 Issued an adjustment note (credit note) to Academy Diving School for 4 wetsuits at $275 each that was not the size they required. The cost of the wetsuits to us was $400 and they were put back into inventory. 20 Cash sale of inventory to the value of $1,100 (cost of sales $550). 23 Paid Excitement Plus $2,600 of the amount owing to them. 25 Credit sale to Serious Fun of skateboards for $7,200 (cost of sales $3,730). Terms 5/10, n/30. 26 Received and banked a cheque for $5,500 from Surfing World in part payment of the amount owing by them. 27 Purchased wetsuits from Surf Imports for $7,700 on terms of 10/10, n/30. 30 Paid Telstra $170 for telephone expenses. 30 The owner cashed a cheque for $840 to pay wages to Scott Walker the sales assistant of $870 less PAYG Withholding of $30 .

The entries have been journalised below. Post ref. Debit Credit 30,900 30,900 31,800 28,200 3,600 24,100 24,100 350 350 19,500 19,500 General journal Date Description 20XX June 1 Cash at bank Capital (Owner's capital contribution) 1 Shop equipment (cost) Bank loan Cash at bank (Display stands, shelving and computer for shop; loan repayable over 3 years) 2 Inventory Accounts payable (Inventory purchase on terms of net 30) 5 Postage and stationery expense Cash at bank (Cash purchase of stationery) 7 Inventory Accounts payable (Credit purchase on terms of 10/10, n/30) 9 Accounts payable Cash at bank Discount received (Supplier paid less prompt payment discount) 11 Prepaid insurance Cash at bank (1 year insurance policy) 12 Advertising expense Cash at bank (Advertising for the month) 13 Accounts receivable Sales revenue (Credit sale on terms of 5/10, n/30) 13 Cost of sales Inventory (Adjust inventory) 14 Accounts receivable Sales revenue (Credit sale on terms of net 30) 19,500 17,550 1,950 4,000 4,000 1,530 1,530 4,600 4,600 2,200 2,200 7,900 7,900 4,400 4,400 4,125 4,125 3,100 3,100 190 190 4,370 230 4,600 1,100 14 Cost of sales Inventory (Adjust inventory) 17 Accounts receivable Sales revenue (Credit sale on terms of net 15) 17 Cost of sales Inventory (Adjust inventory) 18 Accounts payable Inventory (Faulty protective gear returned to supplier) 18 Cash at bank Discount allowed Accounts receivable (Payment received less prompt payment discount) 19 Sales returns and allowances Accounts receivable (Wetsuits returned by customer put back into inventory) 19 Inventory Cost of sales (Adjust inventory) 20 Cash at bank Sales revenue (Cash sale) 20 Cost of sales Inventory (Adjust inventory) 23 Accounts payable Cash at bank (Part payment of amount owing) 25 Accounts receivable Sales revenue (Credit sale on terms of 5/10, n/30) 1,100 400 400 1,100 1,100 550 550 2,600 2,600 7,200 7,200 3,730 3,730 5,500 5,500 7,700 7,700 25 Cost of sales Inventory (Adjust inventory) 26 Cash at bank Accounts receivable (Payment received from customer) 27 Inventory Accounts payable (Credit purchase on terms of 10/10, 1/30) 30 Telephone expense Cash at bank (Pay telephone expense) 30 Wages expense Cash at bank PAYG withholding payable (Wages paid to Scott Walker) 170 170 870 840 30 Post to the general ledger accounts. The accounts receivable and accounts payable subsidiary ledgers are provided for information only. Accounts receivable subsidiary ledger Credit Debit 4,125 1,100 Credit Academy Diving School Date Explanation June 17 Invoice 19 Adjustment note Serious Fun Date Explanation June 13 Invoice 18 Receipt 25 Invoice Surfng World Date Explanation June 14 Invoice 26 Receipt Debit 4,600 Acct code: ADI Balance 4,125 Dr 3,025 Dr Acct code: SFU Balance 4,600 Dr 0 7,200 Dr Acct code: SWO Balance 7,900 Dr 2,400 Dr 4,600 7,200 Credit Debit 7,900 5,500 Accounts payable subsidiary ledger Debit Credit 24,100 190 2,600 Excitement Plus Date Explanation June 2 Invoice 18 Adjustment note 23 Payment Surf Imports Date Explanation June 7 Invoice 9 Payment 27 Invoice Acct code: EPL Balance 24,100 23,910 21,310 Acct code: SIM Balance 19,500 0 7,700 Debit Credit 19,500 19,500 7,700 No. 100 Cash at bank Date Details Debit Date Details Credit June June No. 110 Accounts receivable Date Details Debit Date Details Credit June June Inventory No. 120 Date Details Debit Date Details Credit June June No. 130 Prepaid insurance Date Details Debit Date Details Credit June No. 171 Shop equipment (cost) Date Details Debit Date Details Credit June No. 172 Accumulated depreciation - shop exuipment Date Details Debit Date Details Credit No. 200 Accounts payable Date Details Debit Date Details Credit June June PAYG withholding payable Date Details No. 210 Debit Date Details Credit June No. 220 Superannuation payable Date Details Debit Date Details Credit No. 230 Bank loan Date Details Debit Date Details Credit June No. 300 Capital Date Details Debit Date Details Credit June No. 310 Drawings Date Details Debit Date Details Credit No. 320 Profit or loss summary Date Details Debit Date Details Credit No. 400 Sales revenue Date Details Debit Date Details Credit June No. 410 Sales returns and allowances Date Details Debit Date Details Credit June No. 420 Discount received Date Details Debit Date Details Credit June No. 500 Cost of sales Date Details Debit Date Details Credit June June No. 600 Advertising expense Date Details Debit Date Details Credit June No. 610 Depreciation expense Date Details Debit Date Details Credit No. 620 Discount allowed Date Details Debit Date Details Credit June No. 630 Electricity expense Date Details Debit Date Details Credit No. 640 Insurance expense Date Details Date Details Credit No. 650 Interest expense Date Details Debit Date Details Credit No. 660 Postage and stationery expense Date Details Debit Date Details Credit June No. 670 Superannuation expense Date Details Debit Date Details Credit No. 680 Telephone expense Date Details Debit Date Details Credit June No. 690 Wages expense Date Details Debit Date Details Credit June