Question 1:

Prepare journal entries for each of the 11 events listed below. The rate of goods and service tax (GST) is 15%. Note that dates, reference numbers and narrations are not required.

1. A client is sent an invoice for services provided, $2,415 (including GST).
2. Paid last months GST owing to the Inland Revenue Department, $3,145.
3. Paid a newspaper for advertising, $920 (including GST).
4. Paid wages to an employee, $825. Total wages for the employee are $1,000. The PAYE tax wont be paid to the Inland Revenue Department until next month.
5. Depreciation on vehicles of $2,125 is recorded.
6. As at the balance date (31 March), an adjusting entry for insurance is required. The companys insurance provides cover for the period 1 October to 30 September at a cost of $3,174 (including GST). This amount has already been paid. Assume the income statement approach is used.
7. As at the balance date, an adjusting entry for the electricity expense is required. While the company has not yet received an invoice for Marchs electricity expense, the companys accountant has estimated that the invoice will be for $2,277 (including GST).
8. As at the balance date, the company accountant wishes to close the Rent Expense account. It has a debit balance of $5,730.
9. As at the balance date, the company accountant wishes to record the income tax expense. She notes that profit before tax is $15,000, the income tax rate is 28% and a provisional income tax expense of $4,000 has already been recorded.
10. As at the balance date, the company accountant wishes to update the Retained Earnings account. After closing the various revenue and expense accounts to the Profit and Loss Summary Account, she notes that total revenue is $560,000 and total expenses (including income tax) are $610,000. There are no dividends.
11. As at the first day of the new accounting period, the company accountant wishes to reverse accrued revenue of $1,320 (excluding GST).