Question
Prepare the general ledger T-accounts showing opening balance, transactions, balance-day adjustments, and closing balance for the month of June 2022. Also show the opening balance
Prepare the general ledger T-accounts showing opening balance, transactions, balance-day adjustments, and closing balance for the month of June 2022.
Also show the opening balance for the next month for assets, liabilities, and equities accounts.
(NOT need to show for revenue and expenses accounts their opening balances for the next month
Transactions in the month of June 2022:
Date | Description | Amount ($) |
June 1 | Paid general insurance premium | 2,921 |
June 2 | Advertising placement fees – Cash | 1,981 |
June 3 | Purchase promotional material supplies | 815 |
June 6 | Paid rental of business premises | 3,845 |
June 7 | Payment to suppliers - on account | 2,876 |
June 8 | Rental commission – on account | 2,731 |
June 13 | Rental Commission - Cash | 3,620 |
June 14 | Cash Withdrawals by Owner | 981 |
June 15 | Paid coffee and biscuits for June (staff consumption) | 456 |
June 16 | Receive payment from customers on account | 2,979 |
June 20 | Advertising Expenses – on account | 1,280 |
June 21 | Auction commission – on account | 1,811 |
June 22 | Advertising placement fees – on account | 1,813 |
June 23 | Paid advertising expenses | 614 |
June 24 | Paid lunch with Mr Tan, a customer | 344 |
June 27 | Auction Commission – Cash | 3,464 |
June 28 | Additional cash contributed by the owner | 4,800 |
June 30 | Paid Staff Wages | 5,920 |
The business has the following opening balances on June 1, 2022:
Promotional material supplies $563
Furniture & fittings $27,642
Bank Loan (due December 2023) $20,983
Accounts Payable $7,287
Motor Vehicle $36,371
Accounts Receivable $23,202
Cash at Bank $18,019
Capital?
Extra info:
1. The business was purchased on June 1, 2022.
2. Show three types of revenue:
a. Rental Commission
b. Auction Commission
c. Advertising Fees
All revenues received are for the month of June 2022.
(Tip: Use an appropriate name for each of the T-account of revenue).
3. Rental and insurance period start on June 1.
4. Insurance expenses and promotional material supplies are initially recognized as an asset.
5. Rental expense is initially recognized as an expense.
6. Refer to the following information for the balance-day adjustments:
a) Closing stock of promotional material supplies on 30/6 ($) 895
b) Furniture & fittings scrap value ($) 0
c) Furniture & fittings useful life (years) 2
d) Rent paid for (months) 4
e) Insurance paid for (months) 3
f) Motor vehicle scrap value ($) 4,488
g) Motor vehicle useful life (years) 3
h) Bank loan interest rates (% per year) 11
i) Use 360 days in a year for interest calculation.
7. Use 2 decimal points when relevant.
8. Closing balance for all revenue and expense accounts
- Show the ending balance for all revenue and expense accounts as ‘Closing balance in the General Ledger T-account. No closing entries to the income statement are required.
- NOT required to show the opening balance of the next month for all revenue and expense accounts.
Step by Step Solution
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Step: 1
Opening Balances June 1 2022 Assets Promotional Material Supplies 563 Furniture Fittings 27642 Motor Vehicle 36371 Accounts Receivable 23202 Cash at Bank 18019 Liabilities Bank Loan due December 2023 ...Get Instant Access to Expert-Tailored Solutions
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