$4.$ This handout contains the general information required to complete the assignment, as well as background information about the company and the transaction details.

COMPANY BACKGROUND

$$ Scallion Ltd began business on $1$ July $2022,$ specialising in the purchase and supply of packaging materials. An accounting system was designed and a chart of accounts was established. The business uses the periodic inventory system and is registered for GST at the rate of $10\%.$

$$ The company also employs two office staff who work a five$-$day week from Monday to Friday. One office staff member is responsible for overseeing the daily running of the business, including inventory ordering; the other maintains the company$$s accounting records.

ACCOUNTING SYSTEM

The company has a financial year$-$end $30$ June and prepares adjusting entries only at the end of the year. The firm uses the following journals to maintain its accounting records:

$$ Sales Journal: to record all credit sales of inventory

$$ Purchases Journal: to record all credit purchases of inventory

$$ Cash Receipts Journal: to record all cash receipts

$$ Cash Payments Journal: to record all cash payments

$$ General Journal: to record all transactions other than the above

Scallion Ltd uses subsidiary ledgers for Accounts Receivable and Accounts Payable only.

The company maintains a general ledger to record the increases and decreases in each asset, liability, owner$$s equity, revenue and expense account. Subsidiary ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. The company maintains a periodic system to account for its inventory.

GOODS AND SERVICES TAX $($GST$)$

The company is registered for GST at the rate of $10\%$ and is required to pay GST on its purchases and to collect GST when making sales. The company uses a GST paid account for GST on purchases and a GST collected account for GST on sales $($for manual records$).$

YOUR ASSIGNMENT

The firm$$s in$-$house accountant has gone overseas for one month. You have been hired by Scallion Ltd to carry out the accounting duties in the accountant$$s absence$.$ This assignment provides you with the unadjusted trial balance at the end of May and requires you to record typical transactions for a retail business for the last month of the financial year. Once these transactions have been recorded and posted, you are required to complete the accounting cycle by journalising and posting adjusting and closing entries and preparing financial statements.

UNADJUSTED TRIAL BALANCE

The unadjusted trial balance as at $1$ June $2023$ is presented below:

ACCOUNT NAME $1$ June Opening Balances

Cash $ $70,785$

Accounts Receivable $25,740$

Allowance for doubtful debts $2,645$

Inventory $32,400$

Office Supplies $1,800$

Prepaid General Insurance $3,600$

GST Paid $6,300$

Equipment $13,500$

Machinery $65,000$

Truck $46,100$

Land $350,000$

Accounts Payable $69,300$

GST Collected $15,795$

Share Capital $340,000$

Discount received $13,200$

Repairs and maintenance $7,400$

Purchases $486,200$

Purchases returns & allowances $7,040$

Salaries expense $83,600$

Sales $789,800$

Sales returns & allowances $8,800$

Electricity expense $12,100$

Telephone expense $2,505$

Office expenses $13,500$

Discount allowed $8,450$

$$

SUBSIDIARY LEDGERS

The individual balances of Accounts receivable and Accounts payable as at $1$ June $2023$ are shown below. Amounts include GST$.$

Accounts Receivable Subsidiary Ledger

CUSTOMER $1$ June Opening Balances

Croft Ltd $ $2,970$

M$.$ Biller $14,850$

O$.$ Mowen $7,920$

TOTAL $25,740$

Accounts Payable Subsidiary Ledger

CREDITOR $1$ June Opening Balances

Tumult Ltd $ $17,820$

Lynwood Ltd $29,700$

Dyson Ltd $21,780$

TOTAL $69,300$

ACCOUNTING PROCEDURES

Transactions are recorded by the accountant on a daily basis in the appropriate journal. Transactions are posted daily from the General Journal and the Cash Receipts and Cash Payments Journal to the Accounts receivable and Accounts payable subsidiary ledgers. Totals of the special journals are posted to the appropriate accounts at the end of the month.

Note: Amounts are to be recorded as the exact amounts in the journals and ledgers but are to be rounded to the nearest dollar when preparing financial statements.

TRANSACTIONS

The following transactions occurred during June $2023$ and are INCLUSIVE of GST where appropriate.

$2023$

June $1$ Scallion Ltd shareholders invested $$60,000$ cash in the business.

Purchased land and an existing retail store for $$110,000$ of which $$77,000$ is considered land cost. Paid $$33,000$ by cheque no$.98$ for the retail store and signed a mortgage payable for the balance. The retails store is depreciated over its useful life of $10$ years.

$2$ Paid Lynwood Ltd $$14,700$ less a discount of $$594$ with cheque no$.99.$

Received cheque from M$.$ Biller for $$10,000$ as part payment of his account

Purchased store furniture on credit terms from Corma Ltd for $$7,480,$ terms n$/60.$

$5$ Purchased inventory on credit terms from Tumult Ltd $$4,400$; i