INSTRUCTIONS

1. Enter the transactions for Weeks 1 5 into the appropriate Journal for the month of June 2023. Next, post all the Journal transactions to the ledger accounts as specified in the Account System Information section of the introduction.
2. Total all Special Journal columns and post to the appropriate ledger account at the end of the month.
3. Prepare the unadjusted Trial Balance as at 30 June 2023 on the Worksheet provided.
4. Prepare the adjusting entries shown on page 10 in the General Journal and post to the relevant ledger accounts. Now enter the adjustments in the relevant worksheet columns and prepare an adjusted Trial Balance.

This is all the information in the worksheet

INTRODUCTION The objective of this Accounting practice set is to provide students with an insight into the process of recording transactions, completing adjusting and closing entries, and preparing financial statements for a retail business. Company Background Cologne Wines Pty Ltd has been in business in Portarlington, Victoria since July 2017. The company was started by James Popsford and operates a large showroom which sells wines from all over Australia on a wholesale basis to other liquor stores on both credit and cash terms. The company's Share Capital consists of 486,000 Ordinary Shares, originally issued at $1 each and which are owned by various members of the Ponsford family. The company has employed a combination of sales and administration staff to run the business since July, 2017. The company has generally been profitable since it was originally formed and has reasonable liquidity. Accounting System Information & Procedures The company has a financial year end of 30 June and prepares adjusting entries at the end of the financial year. To ensure efficiency of its accounting procedures, the company uses the following Special Journals to maintain its accounting records: 1. Sales Journal (SJ): to record all sales of Inventory on credit 2. Purchases Journal (PJ): to record all Purchases of Inventory on credit 3. Cash Receipts Journal (CRJ): to record all Cash Receipts 4. Cash Payments Journal (CPJ): to record all Cash Payments 5. General Journal GJ): to record all transactions other than the above. Business transactions are recorded for Cologne Wines Pty Ltd on a daily basis in one of these five journals in the accounts. Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted immediately to the relevant ledger account if they are entered into the general journal, the "other" column of the Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the end of the month and then posted to the appropriate accounts. The company uses a periodic inventory system. In practice, the company would be required to collect and pay Goods and Services Tax (GST) on its sales and purchases. However, for the purposes of this exercise, GST has been excluded. Please Note: All amounts in this practice set should be rounded off to the nearest dollar. UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS As at 31 May 2023 Ace. Credit ($) 100 101 102 103 104 Debit ($) 263,412 102,060 64,719 334,800 316,980 4,860 218,700 105 150 151 74,250 160 161 36,450 65,826 200 201 202 203 204 205 206 250 260,118 486,000 412,938 300 301 302 303 400 401 Account Cash at Bank Accounts Receivable Control Stationery Supplies Inventory Prepaid Rent (paid 1 March 2023) Prepaid Insurance (paid 1 Nov. 2022) Showroom Fittings Accumulated Depreciation - Showroom Fittings Equipment Accumulated Depreciation - Equipment Accounts Payable Control Interest Payable Utilities Payable Wages Payable Salaries Payable Tax Payable Dividend Payable Mortgage Loan (due 31 July 2038) Share Capital Retained Profits (1 July 2022) Dividends Declared Profit and Loss Summary Sales Revenue Sales Discounts (Discount Allowed) Sales Returns and Allowances Purchases Purchase Discounts (Discount Received) Purchase Returns and Allowances Freight-Out Wages Expense - Sales Staff Depreciation Expense - Showroom Fittings Depreciation Expense - Equipment Stationery Expense Rent Expense Insurance Expense Advertising Expense Interest Expense Utilities expense Tax Expense Sundry Expenses Salaries Expense - Office Staff Bad Debts Expense 1,733,886 402 500 13,311 3,753 825,795 501 502 10,368 4,347 600 1.242 601 414,909 602 603 604 605 606 18,792 607 608 609 25,056 610 611 1,296 325,998 612 613 3,009,933 3,009,933 SUBSIDIARY LEDGERS Schedule of Accounts Receivable As at 31 May 2023 Note: Cologne Wines Pty Ltd offers all customers Credit Terms 2/10, n/30, unless otherwise stated Acc. No. Account Amount ($) Invoice date 101-1 101-2 Anglesea Wine Cellars Ballarine Wine Cellars Colac Wine Cellars Drysdale Wine Cellars 30 May 20 May 28 April 14 May 40,824 20,628 27,918 12,690 101-3 101-4 102,060 Schedule of Accounts Payable As at 31 May 2023 Account Credit terms Amount ($) Acc. No. Invoice date 200-1 Ocean Grove Wineries Point Lonsdale Wineries 30 May 27 May 2/10, n/60 1/10, n/45 18,630 47,196 200-2 $65,826 TRANSACTIONS For June 2023 Date Transaction Week 1 June 1 Anglesea Wine Cellars paid the balance of its account and were given a discount of $272. Delivered goods to Balarine Wine Cellars for $29,268 and issued invoice #181. Issued cheque #940 to pay $3,240 for delivery costs of inventory to their premises. June 4 Paid the amount owing to Ocean Grove Wineries and Cheque #941 was sent to the creditor. June 7 Total Cash Sales for the week were $8,262. Week 2 June 9 Colac Wine Cellars paid $11,718 toward the amount it owes us. June 10 Made a purchase from Point Lonsdale Wineries for $25,110 for inventory: Terms are 1/10, n/45 and date of invoice was 10 June. The firm issued cheque #942 for the purchase of Stationery Supplies amounting to $2,376. June 11 Anglesea Wine Cellars purchased inventory of $29,484. Invoice #182 was issued. June 12 Some of the wine bottles purchased on 10 June from Point Lonsdale Wineries were the incorrect vintage. Returned inventory in exchange for a Credit Note of $8,100. June 14 Total Cash Sales for the week were $11,286. Week 3 June 15 Paid office staff salaries of $31,482. Cheque #943 was issued for payment. Cheque #944 was issued to pay sales staff wages, $26,730. June 16 Purchased inventory from Ocean Grove Wineries for $41,310. The invoice was dated 16 June. Credit terms are 2/10, n/30. June 17 Sold inventory to Colac Wine Cellars for $53,298 on invoice #183. Issued cheque #945 to pay for delivery costs of $4,050. June 19 The company issued cheque #946 to pay the amount still owing to Point Lonsdale Wineries June 21 Total Cash Sales for the week were $10,719. Week 4 June 23 Colac Wine Cellars returned $10,098 of inventory purchased on 17 June. Issued a Credit Note for the transaction. June 24 Issued Cheque #947 for $5,400 to pay for the annual gift the company donates to the Smith Family Charity Fund. The gift is to be recorded as a Sundry Expense in the accounts. June 25 Purchased inventory from Point Lonsdale Wineries, worth $40,230. The terms were 1/10, n/45. Date of the invoice was 25 June. June 26 Received the total amount owing from Colac Wine Cellars. June 28 Total Cash Sales for the week were $16,848. Week 5 June 29 allarine Wine Cellars paid the entire balance of its still outstanding account. June 29 Reduced $32,400 of the amount owing to Point Lonsdale Wineries and Cheque #948 was issued. June 29 A dividend of $75,900 was declared to the company shareholders. However, the dividend will not be paid until 16 October, 2023. Paid sales staff wages, $26,730 and Cheque #949 was issued to meet the payment. June 30 Issued additional shares to the owners of the Company for cash and $54,000 was received and banked from the Share issue. Total Cash Sales for the week were $10,044. ADJUSTING ENTRIES a) The Showroom Fittings were installed on 1 July 2022. They have a useful life of 9 years and no salvage value. The Straight-Line method is used to depreciate the Showroom Fittings. b) The Equipment was installed on 1 July 2017. They have a useful life of 10 years and estimated salvage value of $1,350. The Straight-Line method is used to depreciate the Equipment. c) Twelve months of Rent was prepaid on 1 March 2023. Of the original prepaid amount, $105,660 worth of Rent has now expired. d) A count of Stationery Supplies indicates that $36,585 still remain on hand at year end. e) A one-year Insurance policy was purchased on 1 November 2022 for $4,860. f) Interest on the NABBank Mortgage Loan is charged at 7% per annum and is paid annually on 1 August (the interest expense should be rounded up to the nearest dollar). The NAB Bank Mortgage Loan was originally taken out on the 1 August, 2022. g) The company has been informed that Drysdale Wine Cellars has been declared bankrupt and Cologne Wines Pty Ltd has agreed to write off the amount owing as a Bad Debt. The company uses the direct write-off method to account for any Bad Debts in the books. h) A telephone bill for $2,754 for June was received on 5 July 2023. The amount has not yet been recorded. The company records them as a Utilities Expense. i) Office Staff are paid once per month, $31,482. The Office Staff were last paid on the 15 June_2023. Exactly half of one month Office Staff wages are still owing. 1) Sales Staffare paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June 2023. One day of the wages bill is still owed to the Sales Staff. k) The Accountant of the company has estimated that Tax Payable for the year ended 30 bune, 2023 will only be $37,029. This amount is to be paid on 31 October 2023