(((((((Post to the general ledger accounts. The accounts receivable and accounts payable subsidiary ledgers are provided for information only.)))))))

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 $29,200 and computer equipment for the shop from Computer Wizards for $4,000. These were paid for with a loan of $29,200 from the bank and cheque for $4,000 from the business bank account. The bank loan is repayable over 3 years.

2

Purchased inventory (skateboards and protective gear) from Excitement Plus for $24,500 on terms on net 30.

5

Cash purchase of stationery from Officeworks for $310.

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 $3,800 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 $5,400 (cost of sales $2,700). This customer was given terms of 5/10, n/30.

14

Credit sale to Surfing World of various inventory items for $7,200 (cost of sales $4,000). Terms net 30.

17

Credit sale to Academy Diving School of 10 wetsuits at a discounted price of $280 each on terms of net 15. Cost of sales $2,700.

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 3 wetsuits at $280 each that was not the size they required. The cost of the wetsuits to us was $450 and they were put back into inventory.

20

Cash sale of inventory to the value of $1,000 (cost of sales $450).

23

Paid Excitement Plus $2,200 of the amount owing to them.

25

Credit sale to Serious Fun of skateboards for $7,000 (cost of sales $3,740). Terms 5/10, n/30.

26

Received and banked a cheque for $5,500 from Surfing World in part payment of the amount owing by them.

27

Purchased wetsuits from Surf Imports for $8,400 on terms of 10/10, n/30.

30

Paid Telstra $200 for telephone expenses.

30

The owner cashed a cheque for $830 to pay wages to Scott Walker the sales assistant of $890 less PAYG Withholding of $60.

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)		33,200
	Bank loan			29,200
	Cash at bank			4,000
	(Display stands, shelving and computer for shop; loan repayable over 3 years)
2	Inventory		24,500
	Accounts payable			24,500
	(Inventory purchase on terms of net 30)
5	Postage and stationery expense		310
	Cash at bank			310
	(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		3,800
	Cash at bank			3,800
	(1 year insurance policy)
12	Advertising expense		1,530
	Cash at bank			1,530
	(Advertising for the month)
13	Accounts receivable		5,400
	Sales revenue			5,400
	(Credit sale on terms of 5/10, n/30)
13	Cost of sales		2,700
	Inventory			2,700
	(Adjust inventory)
14	Accounts receivable		7,200
	Sales revenue			7,200
	(Credit sale on terms of net 30)
14	Cost of sales		4,000
	Inventory			4,000
	(Adjust inventory)
17	Accounts receivable		2,800
	Sales revenue			2,800
	(Credit sale on terms of net 15)
17	Cost of sales		2,700
	Inventory			2,700
	(Adjust inventory)
18	Accounts payable		210
	Inventory			210
	(Faulty protective gear returned to supplier)
18	Cash at bank		5,130
	Discount allowed		270
	Accounts receivable			5,400
	(Payment received less prompt payment discount)
19	Sales returns and allowances		840
	Accounts receivable			840
	(Wetsuits returned by customer put back into inventory)
19	Inventory		450
	Cost of sales			450
	(Adjust inventory)
20	Cash at bank		1,000
	Sales revenue			1,000
	(Cash sale)
20	Cost of sales		450
	Inventory			450
	(Adjust inventory)
23	Accounts payable		2,200
	Cash at bank			2,200
	(Part payment of amount owing)
25	Accounts receivable		7,000
	Sales revenue			7,000
	(Credit sale on terms of 5/10, n/30)
25	Cost of sales		3,740
	Inventory			3,740
	(Adjust inventory)
26	Cash at bank		5,500
	Accounts receivable			5,500
	(Payment received from customer)
27	Inventory		8,400
	Accounts payable			8,400
	(Credit purchase on terms of 10/10, n/30)
30	Telephone expense		200
	Cash at bank			200
	(Pay telephone expense)
30	Wages expense		890
	Cash at bank			830
	PAYG withholding payable			60
	(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		2,800		2,800 Dr
	19	Adjustment note			840	1,960 Dr
Serious Fun						Acct code: SFU
Date		Explanation		Debit	Credit	Balance
June	13	Invoice		5,400		5,400 Dr
	18	Receipt			5,400	0
	25	Invoice		7,000		7,000 Dr
Surfng World						Acct code: SWO
Date		Explanation		Debit	Credit	Balance
June	14	Invoice		7,200		7,200 Dr
	26	Receipt			5,500	1,700 Dr

Accounts payable subsidiary ledger
Excitement Plus						Acct code: EPL
Date		Explanation		Debit	Credit	Balance
June	2	Invoice			24,500	24,500
	18	Adjustment note		210		24,290
	23	Payment		2,200		22,090
Surf Imports						Acct code: SIM
Date		Explanation		Debit	Credit	Balance
June	7	Invoice			19,300	19,300
	9	Payment		19,300		0
	27	Invoice			8,400	8,400