Scenario

You are a bookkeeper at Azure Beach Accounting and Financial Services (ABAFS) that specialises in providing bookkeeping, accounting, and taxation services, as well ad-hoc special projects. Your manager has asked you to assist him prepare the balance day adjustments for Johnstones Tree Services.

Task 1: Balance Day Adjustments

You have been provided with the following information and requested to prepare the general journal entries for the required balance day adjustments for the year ended 30/6/20x3:

There are salaries and wages owing of $13,750.

A business insurance policy was paid on 30/4/20x3 for $18,000 plus GST. The policy related to the period 1/5/20x3 to 30/4/20x4.

Johnstones Tree Services was owed interest on an investment of $2,790.

The provision for Annual Leave has a balance of $23,750 but the payroll system is showing the total value of the annual leave entitlement for employees as being $33,500.

The allowance for Doubtful debts should be 5% of the balance of Accounts Receivable. The accounts receivable balance at 30/6/20x3 is $76,320 and the balance of the Allowance for Doubtful Debts was $3,050.

A stocktake of the inventory on hand was completed on 30/6/20x3. The value of the stocktake was $17,870. The inventory asset account as at 30/6/20x3 before adjustments was $18,460.

Reversal of Balance Day adjustments

After finalising the end of year accounts and financial reports, your manager has requested you to prepare the general journal entries to reverse the appropriate balance day adjustments on 1/7/20x3

a completed General Journal to reverse the appropriate balance day adjustments on 1/7/20x3.

General journal				Folio :
Date	Details	Account number	Debit $	Credit $