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 they occur. 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 . 3 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 4 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. 5 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 1st June. NOTE: the income and expense accounts will have 6 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 records with control accounts. 4. Complete the adjusted Trial Balance ( 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. internal Income Statement and Balance Sheet. You should put aggregated amounts and a "Note" for the following items: Sales and Sales Returns Cost of Sales Accounts Receivable and Allowance for Doubtful Debts GST T Branch, Capital (incorporate drawings and profit in the note)