(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. Totals and balance B/Ds and C/Ds for ledgers accounts are not required for this question.) 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 employees wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis. The business has not registered 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. 100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) 172 Accumulated depreciation - shop equipment 200 Accounts payable 210 PAYG withholding payable 220 Superannuation payable 230 Bank loan 300 Capital 310 Drawings 320 Profit or loss summary 400 Sales revenue 410 Sales returns and allowances 420 Discount received 500 Cost of sales 600 Advertising expense 610 Depreciation expense 620 Discount allowed 630 Electricity expense 640 Insurance expense 650 Interest expense 660 Postage and stationery expense 670 Superannuation expense 680 Telephone expense 690 Wages expense Transactions June 1 The owner opened a bank account for the business with a deposit of $30,200. This is capital provided by him. 1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $27,500 and computer equipment for the shop from Computer Wizards for $3,800. These were paid for with a loan of $27,500 from the bank and cheque for $3,800 from the business bank account. The bank loan is repayable over 3 years. 2 Purchased inventory (skateboards and protective gear) from Excitement Plus for $24,100 on terms on net 30. 5 Cash purchase of stationery from Officeworks for $340. 7 Purchased surfboards and wetsuits from Surf Imports for $19,300 on terms of 10/10, n/30. 9 Paid Surf Imports the amount owing to them less the prompt payment discount. 11 Paid $3,700 for a 1-year insurance policy covering fire, theft, and public liability. 12 Paid $1,530 to Local Newspapers for advertising for the shop for the month. 13 Credit sale to Serious Fun of skateboards and protective gear for $4,400 (cost of sales $2,000). This customer was given terms of 5/10, n/30. 14 Credit sale to Surfing World of various inventory items for $7,600 (cost of sales $3,800). Terms net 30. 17 Credit sale to Academy Diving School of 15 wetsuits at a discounted price of $270 each on terms of net 15. Cost of sales $3,500. 18 Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $210. 18 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. 19 Issued an adjustment note (credit note) to Academy Diving School for 4 wetsuits at $270 each that was not the size they required. The cost of the wetsuits to us was $400 and they were put back into inventory. 20 Cash sale of inventory to the value of $1,000 (cost of sales $550). 23 Paid Excitement Plus $2,100 of the amount owing to them. 25 Credit sale to Serious Fun of skateboards for $7,900 (cost of sales $3,780). Terms 5/10, n/30. 26 Received and banked a cheque for $5,000 from Surfing World in part payment of the amount owing by them. 27 Purchased wetsuits from Surf Imports for $8,500 on terms of 10/10, n/30. 30 Paid Telstra $190 for telephone expenses. 30 The owner cashed a cheque for $850 to pay wages to Scott Walker the sales assistant of $900 less PAYG Withholding of $50. The entries have been journalised below. General journal Date Description Post ref. Debit Credit 20XX June 1 Cash at bank 30,200 Capital 30,200 (Owner's capital contribution) 1 Shop equipment (cost) 31,300 Bank loan 27,500 Cash at bank 3,800 (Display stands, shelving and computer for shop; loan repayable over 3 years) 2 Inventory 24,100 Accounts payable 24,100 (Inventory purchase on terms of net 30) 5 Postage and stationery expense 340 Cash at bank 340 (Cash purchase of stationery) 7 Inventory 19,300 Accounts payable 19,300 (Credit purchase on terms of 10/10, n/30) 9 Accounts payable 19,300 Cash at bank 17,370 Discount received 1,930 (Supplier paid less prompt payment discount) 11 Prepaid insurance 3,700 Cash at bank 3,700 (1 year insurance policy) 12 Advertising expense 1,530 Cash at bank 1,530 (Advertising for the month) 13 Accounts receivable 4,400 Sales revenue 4,400 (Credit sale on terms of 5/10, n/30) 13 Cost of sales 2,000 Inventory 2,000 (Adjust inventory) 14 Accounts receivable 7,600 Sales revenue 7,600 (Credit sale on terms of net 30) 14 Cost of sales 3,800 Inventory 3,800 (Adjust inventory) 17 Accounts receivable 4,050 Sales revenue 4,050 (Credit sale on terms of net 15) 17 Cost of sales 3,500 Inventory 3,500 (Adjust inventory) 18 Accounts payable 210 Inventory 210 (Faulty protective gear returned to supplier) 18 Cash at bank 4,180 Discount allowed 220 Accounts receivable 4,400 (Payment received less prompt payment discount) 19 Sales returns and allowances 1,080 Accounts receivable 1,080 (Wetsuits returned by customer put back into inventory) 19 Inventory 400 Cost of sales 400 (Adjust inventory) 20 Cash at bank 1,000 Sales revenue 1,000 (Cash sale) 20 Cost of sales 550 Inventory 550 (Adjust inventory) 23 Accounts payable 2,100 Cash at bank 2,100 (Part payment of amount owing) 25 Accounts receivable 7,900 Sales revenue 7,900 (Credit sale on terms of 5/10, n/30) 25 Cost of sales 3,780 Inventory 3,780 (Adjust inventory) 26 Cash at bank 5,000 Accounts receivable 5,000 (Payment received from customer) 27 Inventory 8,500 Accounts payable 8,500 (Credit purchase on terms of 10/10, n/30) 30 Telephone expense 190 Cash at bank 190 (Pay telephone expense) 30 Wages expense 900 Cash at bank 850 PAYG withholding payable 50 (Wages paid to Scott Walker) Post to the general ledger accounts. The accounts receivable and accounts payable subsidiary ledgers are provided for information only. Accounts receivable subsidiary ledger Academy Diving School Acct code: ADI Date Explanation Debit Credit Balance June 17 Invoice 4,050 4,050 Dr 19 Adjustment note 1,080 2,970 Dr Serious Fun Acct code: SFU Date Explanation Debit Credit Balance June 13 Invoice 4,400 4,400 Dr 18 Receipt 4,400 0 25 Invoice 7,900 7,900 Dr Surfng World Acct code: SWO Date Explanation Debit Credit Balance June 14 Invoice 7,600 7,600 Dr 26 Receipt 5,000 2,600 Dr Accounts payable subsidiary ledger Excitement Plus Acct code: EPL Date Explanation Debit Credit Balance June 2 Invoice 24,100 24,100 18 Adjustment note 210 23,890 23 Payment 2,100 21,790 Surf Imports Acct code: SIM Date Explanation Debit Credit Balance June 7 Invoice 19,300 19,300 9 Payment 19,300 0 27 Invoice 8,500 8,500