prepare general journal, general ledger, trial balance, income statement, statement of changes in equity, and balance sheet:

Table 1: Opening Balances - Part A Nelson Enterprises - Trial Balance (Before Transactions and BDA) Nelson Enterprises as at 31 May 2020 Acc. No. Account Name Debit Credit Banks 2,000 Accounts Receivables 51,010 Allowance for Doubtful Debts 900 Office Supplies 1,500 Prepaid Insurance Prepaid Rent GST Receivable Motor Vehicle 79,000 Accumulated Depreciation - MV 15,984 Accounts Payable 19,056 Accrued Wages Accrued Interest Unearned Service Revenue GST Payable Fixed Interest Loan - 9% Mortgage Loan 28,000 Capital 10,000 Retained Earnings 10,000 Drawings 17,500 Service Revenue 250,070 Insurance Expense Rent Expense Supplies Expense Wages Expense 213,000 Interest Expense Depreciation - Motor Vehicle 364,010 364,010 Table 2: Business Transactions - Part A Nelson Enterprises Date | Business transactions Amount June 1 The owner of the business (Paul Nelson) invested an additional $10,000 of his $10,000 own money into Nelson Enterprises Paid the yearly insurance premium. (treat as a prepayment in the first instance). $3,630 The amount includes GST. In addition to the above transaction you will also be required to determine the appropriate BDA at the end of June. Purchased another Motor Vehicle for the business by borrowing the full amount $22,000 with a 5-year fixed interest rate loan of 9%. Interest is paid quarterly and the first interest payment occurs on 1 September 2020. Base the accrued interest on the quarterly amount. The Motor Vehicle is to be depreciated at a rate of 40% p.a. over the next 5 years using the reduced balance method and has a residual value of $2,000. The amount includes GST. Note 1: Use the reduced balance approach illustrated in Slide 31 of the week 9 lecture. Note 2: Assume the opening balance of $79,000 in the motor vehicle account has already been depreciated at a rate of 40% p.a. for three of its five years useful life. Thus, you are required to depreciate the opening balance for the month of June 2020. These motor vehicles have a scrap value of $5000. Note 3: Show the above two depreciation calculations related to motor vehicles separately in the general journal and the general ledger. Note 4: Interest of the mortgage was last paid on 31 March 2020. Interest on the Mortgage Loan is calculated on a fixed rate of 6%. p.a. Note 5: Show the two interest calculations separately in the general journal and the general ledger. Note 6: In addition to the above purchase of the motor vehicle you will also be required to determine the appropriate BDA at the end of June for depreciation and interest. 4 Received cash for services yet to be performed. The amount includes GST. $11,220 Purchased office supplies paying cash. The amount includes GST. Treat the $1,100 purchase of office supplies as an asset in the first instance. Office supplies on hand at the end of the month were valued at $1,200. In addition to the above transaction you will also be required to determine the appropriate BDA at the end of June. 9 Received cash for services provided. The amount includes GST $4,433 19 Paid wages for the previous three weeks work. Note a working week consists of 13,500 5 days and wages are always paid on Friday. Do not account for PAYE tax. In addition to the above transaction you will also be required to determine the appropriate BDA at the end of June. 21 Received cash from customer for an invoice dated the previous month. 25,000 21 |Nelson withdrew cash from the business accounts 2,500 26 Provided services on credit terms. The amount includes GST. 22,990