Information Concerning the Business:

ABC Supplies is a business based in the Huon Valley, supplying apple trees to a number of retail nurseries in Tasmania. The business is registered for GST. The owner David Branch is a qualified horticulturalist and manages the nursery organising shipments and managing a small retail store selling to the public direct. David's bookkeeper has just retired and he asks you if you can help him to record the transactions for June. As you are studying accounting he also asks you to finish off the books for the year and prepare some financial statements for him. The bookkeeper has been keeping the records manually but David is keen for you to use Excel to complete the various records each month.

Other Information:

David sells three varieties of apple trees, Pink Lady, Royal Gala and Golden Delicous.

Credit terms are 2/10, n/30.

All transactions are recorded on the day theyoccur.

Assume transactions are on credit unless it is stated otherwise.

Transaction amounts are "GST inclusive" were relevant.

David uses a perpetual inventory system and the First-in, First-out method to assign costs to Cost of Goods Sold.

All cash payments are initially recorded as an expense or revenue. Any work not completed or unused portion is adjusted at the end of the month.

Expenses that are incurred but not paid at the end of the month are entered the general journal at the end of the month.

For convenience, round all figures to the nearest dollar (you can get Excel to do this for you by showing no cents).

The Trial Balance as at 31 May 2018 prepared by the old bookkeeper is as follows:

Account Name

Acc No

Debit

Credit

Cash at Bank

1-1100

72 500

Accounts Receivable Control

1-1104

19 030

Allowance for Doubtful Debts

1-1105

2 057

Inventory Control

1-1115

39 480

Office Supplies

1-2121

-

Prepaid Insurance

1-2125

-

Prepaid Advertising

1-2126

-

Land

1-3150

-

Building

1-3160

-

Accumulated depreciation - Building

1-3161

-

Bank Term Deposit

1-3200

40 000

Accounts Payable Control

2-1200

8 800

Accrued Expense Payable

2-1215

-

GST Collected

2-1345

68 344

GST Paid

2-1346

56 949

Long-term Loan Payable

2-2260

-

T Branch, Capital

3-1300

164 234

T Branch, Drawings

3-1310

154 600

Profit and Loss Summary

3-9000

-

Sales

4-1000

703 440

Sales Returns and Other Allowances

4-1005

4 300

Interest Revenue

4-8410

-

Discount Received

4-8420

235

Cost of Goods Sold

5-1000

429 822

Advertising Expense

6-1520

7 600

Salaries and Wages Expense

6-2540

48 000

Telephone and Internet Expense

6-2545

5 810

Electricity Expense

6-2547

10 248

Insurance Expense

6-2550

13 660

Office Supplies Expense

6-2555

1 510

Rent Expense

6-3570

36 000

Bank Fee Expense

6-3580

495

Bad Debts Expense

6-3590

-

Discount Allowed

6-3595

7 106

Inventory Write-off Expense

6-3600

-

947 110

947 110

Schedule of Accounts Receivable at 31 May 2018

Acc No

Account

Amount

101

Danta Trees

6 600

102

Mendez Plants

1 760

103

Errol Nursery

5 500

104

Fruit Specialist

3 080

105

Arch&Bow

2 090

19 030

Schedule of Accounts Payable at 31 May 2018

Acc No

Account

Amount

201

Environment Gardens

8 800

202

Sapling Supplies

-

203

Planter Plus

-

8 800

Inventory Subsidiary Ledger at 31 May 2018

Item No

Product Name

Units

Unit Cost

Amount

01

Pink Lady

200

85

17 000

02

Royal Gala

160

55

8 800

03

Golden Delicous

190

72

13 680

39 480

Transactions for the month of June are as follows:

June 1

Cash sales, 70 Golden Delicous @ $132 each. Tax invoice 301.

1

Paid the annual insurance premium of $858, Cheque No 940

2

Credit sales to Danta Trees of 150 Pink Lady @ $176 each and 80 Royal Gala @ $110 each. Tax invoice 302

4

Paid Environment Gardens the amount owing to them and received 2% discount for early payment. Cheque No 941

6

Received payment in full from Errol Nursery (for credit sale 30 May). Receipt No 601.

6

Purchased 125 Pink Lady @ $94.60 each from Sapling Supplies (terms 3/10, 0 /30). Tax invoice number 898.

7

Returned 20 Pink Lady purchased from Sapling Supplies because the plants were damaged in transit. Sapling Supplies sent a credit note $1 892.

8

Paid wages owing for the fortnight $1 800. Cheque No 942.

14

Received $20 000 from Danta Trees. Receipt No 602.

14

Received $ 500 from Mendez Plants. Receipt No 603

15

Paid electricity bill of $451. Cheque No 943.

16

Purchased 100 Golden Delicous @ $82.50 each from Planters Plus (terms 3/10, 0/30). Tax invoice No 753.

18

Credit sales to Fruit Specialists of 70 Royal Gala @ $110 each and 75 Golden Delicous @ $132 each. Tax invoice 303.

18

Paid $ 4 400 for advertising campaign to appear in the monthly agricultural newspaper,

Farm News. The advertisement is to appear in the July to November issues of the newspaper. Cheque No 944

19

Fruit Specialist returned 10 Royal Gala as they had over ordered. Credit note issued to Fruit Specialist. The trees were returned to inventory.

21

Paid for office supplies $1 430. Cheque No 945.

22

Paid wages owing for the fortnight $1 800. Cheque No 946.

23

Cash sale 35 Pink Lady @ $176 each and 55 Golden Delicous @ $132 each. Tax invoice 304.

24

Purchased 55 Royal Gala @ $66 each from Environment Gardens (terms 0/30). Tax invoice 674.

25

Receive advice that Arch&Bow has gone into liquidation, the full amount of owing

written of as bad debt.

26

David contributed a further $10 000 capital to the business.

28

Credit sales to Errol Nursery of 70 Pink Lady @ $176 and 20 Royal Gala @ $110 each. Tax invoice 305.

29

Received $10 000 from Fruit Specialists. Receipt No 604.

30

The business finalised a purchase agreement for the land and building that it currently rents. The business borrowed $700 000 from the AgBank for the purchase of the land and building. The bank paid this directly to the property agent. The value given for the

land is $290 000 and the buildings are valued at $410 000. Rent has been paid up to the date of purchase.

30

End of Month adjustments

Insurance policy paid 1 June each year. The previous insurance payments cover the financial year.

Advertising costs

Wages owing at 30 June $ 1 200.

A stocktake in the office reveals that Office Supplies are $1 640.

The Telephone and Internet account for June for $250 has not been received or paid.

Allowance for Doubtful Debts needs to be adjusted to equal 5% of Accounts Receivable Control at 30 June.

Ten of the Royal Gala trees have perished and must be written off.

You are required to:

1.Record accurately all transactions in the correct journals. You will need to complete the Inventory Subsidiary Ledger cards for the three items of inventory as you go so that you can calculate the Cost of Goods Sold for each lot of sales.

2.Post the journals to the general ledger at the end of the month (and post to the subsidiary ledger daily). The ledger accounts have been created for you but you will firstly need to enter the opening balances in each account on 1^st June. NOTE: the income and expense accounts will have

an opening balance at this point as they are only closed off using closing entries at the end of the financial year. You should get these from the Trial Balance and Schedules above.

3.Reconcile your accounts receivable, accounts payable and inventory subsidiary recordswith control accounts.

4.Complete the adjusted Trial Balance (do this BEFORE completing and posting closing entries).

5.Record closing entries necessary at the end of the accounting period and post them to the Ledger. Balance the Balance Sheet accounts.

6.Complete an internal Income Statement and Balance Sheet. You should put aggregated amounts and a "Note" for the following items:

Sales and Sales Returns

Cost of Salesg

Accounts Receivable and Allowance for Doubtful Debts

GST

T Branch, Capital (incorporate drawings and profit in the note)