ACCOUNTING PROCEDURES

Transactions are recorded by the accountant for Pets Paradise Pty Ltd on a daily basis in the appropriate journal. Transactions are posted daily from the General Journal and the Cash Receipts and Cash Payments Journal. Transactions are also posted daily 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

Week 1

June 1Sold inventory to Cat Hotel $7,380, invoice # 218. Issued cheque #40 to pay delivry costs of $180 to Fasta Courier. The delivery cost is not recoverable from the buyer.

Paid the amount owing to Pet Supplies, cheque #41.

Purchased store supplies for $1,485 from Kmart, cheque #42.

Received the mount owing from Pooch Parlour, receipt #121.

2Received the amount owing from Pets R Us, receipt #122

Paid the amount owing to Glamour Pets, cheque #43.

Recorded cash sales for the week of $11,542.

Week 2

June 3Paid $8,460 of the amount owing to Dr. Harry, cheque #44.

Purchased inventory costing $8,752 from World of Pets, invoice #WP004.

6Received the amount owing from City Farmers, receipt #123.

Sold inventory on credit to VetAus for Ltd $19,035, invoice #219

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7Received from VetAus the amount owing from the May 26 invoice, receipt #124.

Returned unwanted inventory purchased on June 3 to World of Pets and received a credit note for $1,147 (excluding GST).

Paid the amount owing to Doggy Delights, cheque #45.

8 Pets on Parade paid the amount owing, receipt #125.

9Paid World of Pets the amount owing from the April 30 invoice with cheque #46.

Cat Hotel paid the entire balance of their account, receipt #126.

Recorded cash sales for the week of $14,347.

Week 3

June 12 Paid sales staff wages: $3,465, cheque #47.

Purchased inventory from Glamour Pets, $28,890. Date of invoice was June 9, invoice #GP147.

13Pets on Parade purchased $11,745 of inventory on credit, invoice #220.

14Sold inventory on credit to Pets on Parade for $5,108, invoice # 221.

Paid the amount owing to Better Pets and Gardens, cheque #48.

Received the amount owing from VetAus, receipt #127.

15 Paid office staff salaries, $13,905, cheque # 49.

16Purchased inventory from Doggy Delights, $31,185, invoice #DD2841.

Recorded cash sales for the week, $9,638.

Week 4

June 19 Purchased $12,668 of inventory from Pet Supplies, invoice #PS1142. The invoice date was June 16.

Sold inventory on credit to Cat Hotel, $6,278 invoice # 222.

20 Purchased inventory from Doggy Delights for $7,785, invoice #DD2842. The invoice date was June 18.

Received payment for the entire balance of their account from Pets on Parade, receipt #128.

21Issued cheque #50 to pay for June radio advertising at Nova Radio 93.5 for $1,080.

Sold inventory to Pooch Parlour on credit for $16,178, invoice #223.

Issued cheque #51 to pay delivery cost of $113 to Red Parcel Delivery. The delivery cost is not recoverable from the buyer.

Purchased inventory on credit from Pet Supplies, $15,300, invoice #PS1143.

22Cash purchase of inventory from Bird World for $5,783, cheque #52.

23Issued a credit note of $2,228 (excluding GST) to Pooch Parlour for inventory returned.

Paid the entire amount owing to Doggy Delights, cheque #53.

Purchased inventory from Dr. Harry for $12,420. Invoice date was June 22, invoice #DrH1112.

Sold inventory on credit to VetAus for $4,230, invoice #224.

Recorded cash sales for the week, $6,682.

Week 5

June 26Paid Optus telephone bill, $810 by cheque #54.

Paid sales staff wages, $3,465, cheque #55.

27Sold inventory on credit to City Farmers for $9,765, invoice #225.

Purchased inventory from Glamour Pets for $18,315, invoice #GP148. The invoice date was June 25.

28Received the amount owing from Pooch Parlour, receipt #129.

Sold inventory on credit to Pets R Us for $17,865, invoice #226.

Purchased $15,638 of inventory from Better Pets and Gardens, invoice #BPG0003. The date of the invoice was June 27.

29Paid the entire balance owing to Dr. Harry. Cheque #56.

30Pets R Us returned unwanted inventory from the sale on June 28. Issued a credit note for $2,835 (excluding GST).

Sold inventory on credit to Pets on Parade for $5,918, invoice #227.

Issued additional $1 shares to the owners for $18,000 cash.

Issued cheque #57 for $135 to pay Darrell Lee Chocolates for chocolates to give to customers when they visit the store (Hint: treat as sundry expense).

Recorded cash sales for the week of $11,275.

ADDITIIONAL INFORMATION FOR 30 JUNE 2020

Pets Paradise Pty Ltd prepares adjusting entries once each year on 30 June. You should assume all adjusting entries for prior years have been correctly recorded. Enter the following adjustments into the appropriate journal:

1. Store supplies on hand were $6,952.
2. Paula Granger paid store rent on 1 September 2019 for twelve months. The amount was recorded in prepaid rent account.
3. The computers are depreciated using the reducing balance method and the depreciation rate is 15%.
4. Office staff salaries are paid monthly on the fifteenth of each month (Monday, in June) for work performed up to and including that date. Total daily wages total $463.50. (Hint: check working week).
5. A one-year public liability insurance policy was purchased on 1 April 2020 for $1,800.The amount was recorded in the insurance expense account.
6. The store fittings are depreciated using the straight-line method and have a useful life of eight years and a residual value of $6,750. The fittings were installed on 1 March 2020.
7. Interest on the bank loan is charged at 6 per cent per annum. The interest is paid annually on 30 November. The loan was taken out on 1 December 2019.
8. Electricity usage for June was estimated to be $1,598 and telephone usage was estimated to be $778. These amounts have not yet been recorded.
9. Sales staff are paid weekly (for a seven-day working week) every Thursday for work performed up to and including Thursday. Weekly salaries total $1,734. Balance day for 2020 fell on a Tuesday.
10. The directors decided to pay their loyal shareholders a dividend for the first time during 2020. Directors declared a dividend of 52c per share to be paid to shareholders on 30 September. This dividend was approved by the shareholders at a special shareholder meeting held on 25 June 2020.
11. The firm has been informed that Pet City is experiencing financial difficulties. Management of Pets Paradise Pty Ltd has agreed to write-off $4,500 (including GST) of the amount owing as a bad debt. Pet City has indicated it will pay the remaining balance in July. Due to the low level of bad debts, Pets Paradise Pty Ltd uses the direct write-off method.
12. The estimate of tax payable for the year ended 30 June 2010 is $35,300. The amount is due for payment on 30 September 2020.
13. A stock-take on 30 June 2020 determined that the balance of closing inventory is $693,266.