REQUIREMENTS:

To ensure efficiency of its accounting procedures, the company uses the following Special Journals to maintain its accounting records:

Sales Journal (SJ): to record all sales of Inventory on credit

Purchases Journal (PJ): to record all Purchases of Inventory on credit

Cash Receipts Journal (CRJ): to record all Cash Receipts

Cash Payments Journal (CPJ): to record all Cash Payments

General Journal (GJ): to record all transactions other than the above.

Business transactions are recorded for Premier Ovens Pty Ltd on a daily basis in one of these five journals in the accounts.

Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted immediately to the relevant ledger account if they are entered into the general journal, the "other" column of the Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the end of the month and then posted to the appropriate accounts.

The company uses a periodic inventory system.

GST has been excluded.

Please Note: All amounts in this practice set should be rounded off to the nearest dollar.

ADJUSTING ENTRIES

The Warehouse Fittings were installed on 1 July, 2021. They have a useful life of 9 years and no salvage value. The Straight-Line method is used to depreciate the Warehouse Fittings.

The Office Equipment was installed on 1 July, 2016. They have a useful life of 10 years and estimated salvage value of $12,150. The Straight-Line method is used to depreciate the Office Equipment.

Twelve months of Showroom Rent was prepaid on 1 March, 2022. Of the original prepaid amount, $950,940 worth of showroom rent has now expired.

A count of Stationery Supplies indicates that $329,265 still remain on hand at year end.

A one-year insurance policy was purchased on 1 November 2021 for $43,740.

Interest on the ANZ Bank Mortgage Loan is charged at 7% per annum and is paid annually on 1 August (the interest expense should be rounded up to the nearest dollar). The ANZ Bank Mortgage Loan was originally taken out on the 1 August, 2021.

The company has been informed that unfortunately, Mittagong Electric Ovens has been officially declared bankrupt and Premier Ovens Pty Ltd has agreed to write off the amount owing as a bad debt. The company uses the direct write-off method to account for any bad debts in their books.

A telephone bill for $24,786 for June was received on 3 July, 2022. The amount has not yet been recorded. The company records telephone costs as a utilities expense.

Office Staff are paid once per month, $283,338. The Office Staff were last paid on the 15 June, 2022. Exactly half of one month Office Staff wages are still owing.

Sales Staff are paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June, 2022. One day of the wages bill is still owed to the Sales Staff.

The estimated Tax Payable for the year ended 30 June, 2022 is $333,261. This amount is to be paid on 30 October, 2022.

QUESTIONS:

Please refer to the attached images for information on data, figures and material to answer the questions.

a. Prepare the unadjusted Trial Balance as at 30 June 2022 on the Worksheet provided.

b. Prepare the adjusting entries shown on page 10 in the General Journal and post to the relevant ledger accounts. Now enter the adjustments in the relevant worksheet columns and prepare an adjusted Trial Balance.

A Stocktake on 30 June 2022 indicates that the balance of Closing Inventory is $5,463,612. Use this information to complete the remaining columns of the worksheet.

TRANSACTIONS For June 2022 Date Transaction Week 1 June 1 Avoca Gas Ovens paid the balance of its account and were given a discount of $7344. Delivered goods to Bowral Gas Ovens for $263,412 and issued invoice #151. Issued cheque #910 to pay $29,160 for delivery costs of inventory to their premises. June 4 Paid the amount owing to Penrose Oven Manufacturers Cheque #911 was sent. June 7 Total Cash Sales for the week were $74,358. Week 2 June 9 Gerrigong Electric Ovens paid $105,462 toward the amount it owes us. June 10 Made a purchase from Southernland Oven Manufacturers for $225,990 for inventory: Terms are 1/10,n/ 45 and date of invoice was 10 June. The firm issued cheque #912 for the purchase of Stationery Supplies amounting to $21,384. June 11 Avoca Gas Ovens purchased inventory of S265,356. Invoice #152 was issued. June 12 Some of the inventory purchased on 10 June from Southernland Oven Manufacturers was the incorrect size and design. Returned inventory in exchange for a Credit Note of $72.900. June 14 Total Cash Sales for the week were $101,574. Week 3 June 15 Paid office staff salaries of $283,338. Cheque #913 was issued for payment. Cheque #914 was issued to pay sales staff wages, $240,570. June 16 Purchased inventory from Penrose Oven Manufacturers for $371,790. The invoice was dated 16 Junc. Credit terms are 2/10, 1/30. June 17 Sold inventory to Gerrigong Electric Ovens for $479,682 on invoice #153. Issued cheque #915 to pay for delivery costs of $36,450. June 19 The company issued cheque #916 to pay the amount still owing to Southernland Oven Manufacturers June 21 Total Cash Sales for the week were $96,471. June 23 Week 4 Gerrigong Electric Ovens returned $90,882 of inventory purchased on 17 June. Issued a Credit Note for the transaction June 24 Issued Cheque #917 for $48,600 to pay for the annual gift the company donates the UNESCO World Charity Fund. The gift is to be recorded as a sundry expense in the accounts. June 25 Purchased inventory from Southernland Oven Manufacturers, worth $362,070. The terms were 1/10, 1:45. Date of the invoice was 25 June June 26 Received the total amount owing from Gerrigong Electric Ovens. June 28 Total Cash Sales for the week were $151,632. Week 5 June 29 Bowral Gas Ovens paid the entire balance of its still outstanding account. June 29 Reduced S291,600 of the amount owing to Southernland Oven Manufacturers and Cheque #918 was issued. June 29 A dividend of $683.100 was declared to the company sharcholders. However, the dividend will not be paid until 10 October, 2022. Paid sales staff wages, $240,570 and Cheque #919 was issued to meet the payment June 30 Issued additional shares to the owners of the Company for cash, and $486,000 was received and banked. Total Cash Sales for the week were $90,396. UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS As at 31 May 2022 Acc. No. Account Debit ($) Credit (S) 100 Cash at Bank 2.370,708 101 Accounts Receivable Control 918,540 102 Stationery Supplies 582,471 103 Inventory 3,013,200 104 Prepaid Showroom Rent (paid I March 2022) 2,852,820 105 Prepaid Insurance (paid 1 Nov. 2021) 43,740 150 Warehouse Fittings 1.968,300 151 Accumulated Depreciation - Warchouse Fittings 160 Office Equipment 668.250 161 Accumulated Depreciation - Office Equipment 328,050 200 Accounts Payable Control 592,434 201 Interest Payable 202 Utilities Payable 203 Wages Payable 204 Salaries Payable 205 Tax Payable 206 Dividend Payable 250 Mortgage Loan (due 31 July 2030) 2,341.062 300 Share Capital 4,374,000 301 Retained Profits (1 July 2021) 3,716,442 302 Dividends Declared 303 Profit and Loss Summary 400 Sales Revenue 15,604,974 401 Sales Discounts (Discount Allowed) 119,799 402 Sales Returns and Allowances 33,777 500 Purchases 7,432,153 501 Purchase Discounts (Discount Received) 93,312 502 Purchase Returns and Allowances 39,123 600 Freight-Out 11,178 601 Wages Expense - Sales Staff 3,734,181 602 Depreciation Expense - Warchouse Fittings 603 Depreciation Expense - Office Equipment 604 Stationery Expense 605 Showroom Rent Expense 606 Insurance Expense 607 Advertising Expense 169,128 608 Interest Expense 609 Utilities expense 225,504 610 Tax Expense 611 Sundry Expenses 11,664 612 Salaries Expense - Onice Staff 2.933,982 613 Bad Debts Expense 27.089.397 27.089,397 SUBSIDIARY LEDGERS Schedule of Accounts Receivable As at 31 May 2022 Note: Premier Ovens Pty Lid offers all customers Credit Terms 2/10, n/30), unless otherwise stated Acc. No. Account Amount (S) 101-1 101-2 Avoca Gas Ovens Bowral Gas Ovens Gerrigong Electric Ovens Mittagong Electric Ovens Invoice date 29 May 19 May 26 April 13 May 367,416 185,652 251.262 101-3 101-4 114.210 S918,540 Schedule of Accounts Payable As at 31 May 2022 Acc. No. Account Credit terms Amount ($) Invoice date 31 May 200-1 200-2 Penrose Oven Manufacturers Southernland Oven Manufacturers 2/10, n/60 , n 1/10, n/45 167,670 424,764 25 May $592,434