Part 1: Recording Transactions (18%) David Smith has a love of electronics and all things technical. On 1 July 2021, he starts his own business, MicroSystems, as a retailer of laptops, tablets and smartphones. He believes that his expert knowledge and ability to translate technical concepts into everyday terms for his customers will provide him with a competitive advantage against larger retailers, who focus more heavily on price than on providing individualised service. You used to work with David, before he decided to become an entrepreneur and you decided to go to university. In early Aug, you decide to meet up over coffee to discuss your new career paths. David talks about his new business and how he is worried about the large amount of cash he has spent during his first month of trading. You tell him about how you are studying an accounting topic now and launch into an explanation on the difference between the cash and accrual basis. David is impressed and asks you to help him by preparing accrual-based accounting information for his business. He supplies you with a list of transactions and events relating to his previous month of trading, July 2021, and some additional information about the business 1. Credit purchase of 20 laptops @$890 each and 20 smartphones @$360 each. 2. Cash sales of 7 laptops @$1,850 each. 3. David took out a loan of $60,000 from the bank to help finance his growing business (interest rate of 6% per annum, interest payable on the 1st of each month, principal repayable at the end of 5 years). 4. avid hired Carly, a new staff member, whose wages will be $1,900 per fortnight. 5. Paid fortnightly wages of $1,900 to Carly. 6. David used $3,200 from the business bank account to pay his personal credit card. 7. Took a laptop computer from inventory to use in the business' operations from 1st Aug (useful life 3 years, residual value $0). Additional Information 1. Carly has worked her standard hours for the past week, but she is not due to receive her pay until 7th Aug. (Adj #1) 2. David's phone and internet usage for July is estimated at $850, but he has not yet received the bill. (Adj #2) 3. His estimated electricity usage for July is $1,900. (Adj #3) 4. He allows that 5% of his closing Accounts Receivable balance may not be collectible. (Adj #4) David uses straight-line depreciation for all his assets. David uses a perpetual inventory system with a FIFO (first in, first out) inventory costing method. REQUIREMENTS for Part 1 (100 marks total): a) Record the transactions listed for July 2021. 64 marks b) Record any end-of-month adjustments required for July 2021, arising from both the additional information provided and the transactions you have recorded. 36 marks 8. A C G H J L N N o P 0 R T U w X AC AD 1 Student Name: 3 4 5 Trans Microsystems ASSETS LIABIUTIES OWNERS EQUITY INCOME EXPENSES . Data 7 1 8 2 9 3 10 2 11 5 12 13 13 7 12 15 9 16 301 17 1 11 12 19 13 30 21 35 33 16 23 22 34 18 25 39 26 20 21 29 22 391 23 20 24 31 25 32 26 13 24 15 MONTH END ADJUSTMENTS 17 28 29 40 42 43 44 49 TOTALSL g D 0 a D . 37 49 15 50 51 52 7 ASSETS LIABUTES + EQUITY + NCOME EXPENSES D 0 D 0 Hits and Tips: Enbarreductions, druwing with musimybol Enter expenses as negle Hunters heart/delet extra COLUMNS Branded. Ensure all your cel formulas are working correctly when you insert new calma. Part 1 Template +
