Richard Otten is a plumber and has contacted you for some assistance in setting up a new accounting system. Richard has managed to collect enough information to create a chart of accounts for you to work from.

Task 1

You have the option to either work electronically or print off a hard copy of the Excel File which contains the General Journal and Ledger Accounts. The necessary accounts as well as blank accounts to be used if needed have been included.

Enter the information below from the chart of accounts and schedules in order to set up Richard’s new system as an Opening Entry into General Journal and post the relevant information to the General Ledger Accounts provided in the excel file.

R. Otten Plumbing - Chart of Accounts as at 1 July 2016
603	Petty Cash	150.00
605	Bank	7,920.00
607	Accounts Receivable Control	11,355.00
609	Allowance for Bad and Doubtful Debts	287.00
611	Inventory on Hand	12.408.00
613	Stationery on Hand	130.00
615	Prepaid Expenses	2,590.00
619	Repairs Revenue not yet Received	496.00
653	Premises	360,000.00
655	Accumulated Depreciation - Premises	73,500.00
657	Vehicle	33,000.00
659	Acc. Depreciation –Vehicle	12,957.00
661	Plumbing Equipment	15,400.00
663	Accumulated Depreciation – Plumbing Equip	2,460.00
699	GST Receivable	2,000.00
703	Accounts Payable Control	6,049.00
707	Sundry Creditor – Delta Plumbing	3,686.00
709	Accrued Telephone Expense	611.00
711	Rent Expense Payable	750.00
799	GST Payable	4,950.00
753	Another Bank Mortgage Loan (7-year)	45,000.00
503	Capital – Ricahrd Otten	295,199.00

Additional Notes

Schedule of Accounts Receivable

as at 1 July 2016

Acc. No.

60701 New Star Design -

60703 Housing for U 2,495

60705 Gully Construction -

60707 Commonpoor Bank 3,228

60709 Medical Services SA 4,752

60711 The Hotel Group 880

11,355

Schedule of Accounts Payable

as at 1 July 2016

70301 Action Limited -

70303 Go with the Flow 3,168

70305 Flooded Industries 275

70307 Safety First 1,163

70309 Tubes 4 U 1,443

6,049

You will need to enter this information into the appropriate subsidiary ledger accounts.

Task 2

Using the excel file you have already been working on (electronically or in hard copy) to enter the six transactions below into the General Journal and then update the Ledger accounts as required.

Transactions

July 3 Issued Cheque number 718 to Flooded Industries. The cheque amount was $269.50 and a discount of $5.50 (including GST of $0.50) was received for early payment.

July 4 Purchased 20 metres of piping from Tubes 4 U (Invoice 3081) for $95 per metre, plus a total freight charge of $100 and total GST of $200.

July 6 Sold 25 Water Saving Shower Heads for $15 each, plus a total GST of $37.50 to Housing for U (Invoice 4296)

July 10 Purchased 20 submersible pumps from Flooded Industries (invoice 7050) for $20 each, plus a total freight charge of $60 and total GST of $46.

July12 Cash Sale of 30 brass taps for $12.50 each plus a total GST of $37.50 to Heather Philips (Receipt 286)

July 14 Paid “The Telephone Company” (Chq 725) $660 (GST included) for the last months phone bill.

Create solutions using Excel. Set up and answer Richard’s new system as an Opening Entry into General Journal and post the relevant information to the General Ledger Accounts. Below is a picture for the solution format in Excel.