(Note: Although this question is based on the Skate 'n' Surf business the accounts, amounts and transactions involved may differ between questions. Please read each question separately.)
Skate 'n' Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader.
The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employee's wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis.
The business hasnotregistered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting.
Accounting records
The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger. The accounts receivable and accounts payable subsidiary ledgers are provided for information only, you are not required to post to these ledgers.
Chart of accounts
The chart of accounts for Skate 'n' Surf contains the accounts and account numbers below.
1m] Cash at bank 11D Accounts receivable 120 Inventory 13D Prepaid insurance 1?1 Shop equipment (cost) 1?2 Accumulated depreciation shop equipment EDD Accounts payable 21D PAYS withholding payable 220 Superannuation payable 23D Bankloan sou Capital 31o Drawings 32D Prot or loss summary 4m] Sales revenue 41D Sales returns and allowances 42D Discount received soo Cost of sales EDI] Advertising expense Ell] Depreciab'on expense EEI] Discount allowed i530 Electricity expense E4I] Insurance expense ESE! Interest expense EEI] Postage and stationery expense em Superannuation expense EBB Telephone expense BSD Wages expense Transactions June 1 2 5 26 Z 7 27 30 30 The owner opened a bank account for the business with a deposit of $20,000. This is capital provided by him. Purchased display stands, shelvmg etc. (shop equipment) from Shop Displays Pty Ltd for $27,000 and computer equiyment for the shop from Computer Wizards for $4,800. These were paid for with a loan of $25,000 from the bank and cheque for $6,800 from the business bank account. The bank loan is repayable over 4 years. Paid $3,980 for a leyear insurance policy covering re, theft, and public liability. Purchased Inventory (skateboards and protective gear) from Excitement Plus for $20,100 on terms on net 30. Cash purchase of postage stamps and stationery from Australia Post [or $450. Purchased surfboards and wetsuits from Surf Imports for $10,210 on terms of 10/10, n/30. Paid $1,450 to Local Newspapers for advertising for the shop for the month. Paid Surf Imports the amount owing to them less the prompt payment discount. Credit sale to Surng World of various inventory items for $7,190 (cost of sales $3,620). Terms net 30. Credit sale to Academy Diving School of 13 wetsuits at a discounted price of $270 each on terms of net 15. Cost of sales $2,200. Credit sale to Serious Fun of skateboards and protective gear for $4,400 (cost of sales $2,200). This customer was given terms of 5/10, n/30. Cash sale of a skateboard and protective gear for $460 (cost of sales $210). Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. Cash sale of inventory to the value of $980 (cost of sales $470). Issued an adjustment note [credit note) to Academy Diving Schooi for 3 wetsuits at $270 each that was not the size they required. The cost of the wemui'ts to us was $340 and they were put back into inventory. Paid Excitement Plus $5,000 of the amount owing to them. Credit sale to Serious Fun of skateboards for $7,000 (cost of sales $2,500). Terms 5/10, n/30. Purchased wetsuits from Surf Imports For $7,100 on terms of 10/10, n/30. Received and banked a cheque from Academy Diving School for the amount owing by them. Paid Energy Australia $190 for electricity expenses. The owner cashed a cheque for $1,830 to pay wages to Scott Walker the sales assistant of $820 less PAYG Withholding of $30, and $1,040 drawings for himself. We June transactions above have been journalised and posted. Cash at bank Date June 1 Capital 20,000 June 1 Shop equipment (post) 6,800 14 Sales revenue 450 1 Prepaid insurance 3,980 18 Accounts receivable 4,1ao s '30ng and Statiomw 45o expense 23 Sales revenue 980 8 Advertising expense 1,450 2? Accounts receivable 2,?00 8 Accounts pavahle 16,389 25 Accounts payable 5,000 30 Elecln'cit'yr expense 190 30 Wages expense 2'90 3!} Drawings 1,040 Accounts receivable Date Details June 11 Sales revenue 1190 June 18 Cash at bank 4,180 12 Sales revenue 3,510 18 Discount allowed 220 13 Sales revenue 4,400 24 Sales. returns and allowances 810 26 Sales revenue 2,000 2? Cash at bank 2,?00 Inventory No.12!) June ,2 Accounts payable 20,100 June 11 Cost of sales 3,620 2 Accounts payable 18,210 12 Cost of sales 2,200 24 Cost of sales 340 13 Cost of sales 2,200 2? Accounts payable 2,100 14 Cost of sales 210 23 Cost of sales 420 26 Cost of sales 2,500 Prepaid insurance Date Details June 1 .Cash at bank 3,980 Shop equipment {cost} Date Details June 1 Bank loan 25,000 June 1 Cash at bank 6,800 Accounts payable Date Details June 8 Cash at bank 16,389 June 2 Inventory 20,100 8 Discount received 1,821 2 Inventory 18,210 25 Cash at bank 5,000 2? Inventory 2,100 PAYG withholding payable Date Details June 30 Wages expense 30 Bank loan Date June 1 Shop equipment (cost) 25,000 Capital Date June 1 Cash at bank 20,000 Drawings Date June so Cash at bank 1,o4o Sales revenue DBIE June 11 Accounts receivable 12 Accounts receivable 13 Accounts receivable 14 Cash at bank 23 Cash at bank 26 Accounts receivable Sales returns ano allowances Date Details June 24 Accounts receivable 810 1,190 3,510 4,400 460 980 1,000 Cost of sales Date Debit Date 30:16: 11 Inventory 3,620 June 24 Invent-owlr 340 12 Inventory 2,200 13 InventoryI 2,200 14 Inventory:I 210 23 Inventory:I 420 26 InventoryI 2,500 Advertising expense Date Details June 8 Cash at bank 1,450 Discount allowed Date June 18 .Accou nts. receivable 220 Eleiiztriltjt'i,r expense Date Details June '30 Cash at bank 100 Postage and stationery' expense Date Details June 5 Cash at bank 450 1ii'qi'ages expense Date June '30 Cash at bank 290 30 PAYS withholding payable 30 Accounts receivable subsidiarv ledger Academyr Diving School Acct code: ADI Date Explanation Debit Credit Balance June 12 Invoice 3,510 3,510 Dr 24 Adjustment note 010 2,200 Dr 2? Receipt 2,?00 0 Serious Fun Acct code: SFU Date Explanation Balance June 13 Invoice 4,400 4,400 Dr 18 Receipt 4,400 0 2E- Invoice anon anon Dr Surfng World Acct code: SWO Date Explanation Balance June 11 Invoice 2,190 2,190 Dr Accounts payable SuhSldlaW ledger Excitement Plus Acct code: EPL Date Explanation Debit Credit Balance June 2 Invoice 20,100 20,100 25 Pavment 5,000 15, 100 Surf Imports Acct code: SIM Date Explanation Balance June 2' Invoice 10,210 10,210 E! Pavment 18,2 10 0 2? Invoice 2, 100 2,100 Prepare a trial balance as at 30 June. Schedules of accounts receivable and accounts payable will be provided. (Note.- Enter accounts in ascending account number order. Leave blank any answer elds that do not require an answer.) Skate 'n' Surf Trial balance as at 30 June ZUXX Account no. Account Debit
