Skate n Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader. The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employees wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis. The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting. Accounting records The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger. The accounts receivable and accounts payable subsidiary ledgers are provided for information only, you are not required to post to these ledgers. Chart of accounts The chart of accounts for Skate n Surf contains the accounts and account numbers below.

100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) 172 Accumulated depreciation - shop equipment 200 Accounts payable 210 PAYG withholding payable 220 Superannuation payable 230 Bank loan 300 Capital 310 Drawings 320 Profit or loss summary 400 Sales revenue 410 Sales returns and allowances 420 Discount received 500 Cost of sales 500 Advertising expense 510 Depreciation expense 620 Discount allowed 630 Electricity expense 640 Insurance expense 650 Interest expense 660 Postage and stationery expense 670 Superannuation expense 680 Telephone expense 690 Wages expense $440. Transactions June 1 The owner opened a bank account for the business with a deposit of $21,000. This is capital provided by him. 1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $26,000 and computer equipment for the shop from Computer Wizards for $5,000. These were paid for with a loan of $27,000 from the bank and cheque for $4,000 from the business bank account. The bank loan is repayable over 4 years. 1 Paid $3,980 for a 1-year insurance policy covering fire, theft, and public liability. 2 Purchased inventory (skateboards and protective gear) from Excitement Plus for $21,900 on terms on net 30. 5 Cash purchase of postage stamps and stationery from Australia Post f 7 Purchased surfboards wetsuits from Surf Imports for $18,200 on terms of 10/10, n/30. 8 Paid $1,490 to Local Newspapers for advertising for the shop for the month. 8 Paid Surf Imports the amount owing to them less the prompt payment discount. 11 Credit sale to Surfing World of various inventory items for $7,150 (cost of sales $3,680). Terms net 30. 12 Credit sale to Academy Diving School of 17 wetsuits at a discounted price of $250 each on terms of net 15. Cost of sales $3,000. 13 Credit sale to Serious Fun of skateboards and protective gear for $4,300 (cost of sales $2,200). This customer was given terms of 5/10, n/30. 14 Cash sale of a skateboard and protective gear for $440 (cost of sales $210). 18 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. 23 Cash sale of inventory to the value of $900 (cost of sales $420). 24 Issued an adjustment note (credit note) to Academy Diving School for 2 wetsuits at $250 each that was not the size they required. The cost of the wetsuits to us was $310 and they were put back into inventory. 25 Paid Excitement Plus $5,400 of the amount owing to them. 26 Credit sale to Serious Fun of skateboards for $7,100 (cost of sales $3,500). Terms 5/10, n/30. 27 Purchased wetsuits from Surf Imports for $7,200 on terms of 10/10, n/30. 27 Received and banked a cheque from Academy Diving School for the amount owing by them. 30 Paid Energy Australia $210 for electricity expenses. 30 The owner cashed a cheque for $1,770 to pay wages to Scott Walker the sales assistant of $820 less PAYG Withholding of $60, and $1,010 drawings for himself. ne June transactions above have been jour and posted. Cash at bank Date Details June 1 Capital 14 Sales revenue 18 Accounts receivable 23 Sales revenue 27 Accounts receivable Debit Date Details 21,000 June 1 Shop equipment (cost) 440 1 Prepaid insurance 4,085 5 Postage and stationery exp 900 8 Advertising expense 3,750 8 Accounts payable 25 Accounts payable The June transactions above have been journalised and posted. Cash at bank Date Details Debit Date Details June 1 Capital 21,000 June 1 Shop equipment (cost) 14 Sales revenue 440 1 Prepaid insurance 18 Accounts receivable 4,085 5 Postage and stationery expense 23 Sales revenue 900 8 Advertising expense 27 Accounts receivable 3,750 8 Accounts payable 25 Accounts payable 30 Electricity expense 30 Wages expense 30 Drawings No.100 Credit 4,000 3,980 440 1,490 16,380 5,400 210 760 1,010 Accounts receivable Date Details June 11 Sales revenue 12 Sales revenue 13 Sales revenue 26 Sales revenue Debit Date Details 7,150 June 18 Cash at bank 4,250 18 Discount allowed 4,300 24 Sales returns and allowances 7,100 27 Cash at bank No.110 Credit 4,085 215 500 3,750 Inventory Date Details June 2 Accounts payable 7 Accounts payable 24 Cost of sales 27 Accounts payable Debit Date Details 21,900 June 11 Cost of sales 18,200 12 Cost of sales 310 13 Cost of sales 7,200 14 Cost of sales 23 Cost of sales 26 Cost of sales No.120 Credit 3,680 3,000 2,200 210 420 3,500 Prepaid insurance Date Details June 1 Cash at bank No.130 Credit Date Details Debit 3,980 No.171 Credit Date Details Shop equipment (cost) Date Details June 1 Bank loan June 1 Cash at bank Debit 27,000 4,000 Details Accounts payable Date Details June 8 Cash at bank 8 Discount received 25 Cash at bank Debit Date 16,380 June 2 Inventory 1,820 7 Inventory 5,400 27 Inventory No.200 Credit 21,900 18,200 7,200 PAYG withholding payable Date Details Debit Date Details June 30 Wages expense No.210 Credit 60 Bank loan Date Details Debit Date June Details 1 Shop equipment (cost) No.230 Credit 27,000 Capital Date Details Debit Date Details June 1 Cash at bank No.300 Credit 21,000 No.310 Credit Date Details Drawings Date Details June 30 Cash at bank Sales revenue Date Details Debit 1,010 Debit Date Details June 11 Accounts receivable 12 Accounts receivable 13 Accounts receivable 14 Cash at bank 23 Cash at bank 26 Accounts receivable No.400 Credit 7,150 4,250 4,300 440 900 7,100 Sales returns and allowances Date Details June 24 Accounts receivable No.410 Credit Debit Date Details 500 Discount received Date Details Debit Date Details June 8 Accounts payable No.420 Credit 1,820 Details Details Credit 310 Date June 11 Inventory 12 Inventory 13 Inventory 14 Inventory 23 Inventory 26 Inventory Debit Date 3,680 June 24 Inventory 3,000 2,200 210 420 3,500 Advertising expense Date Details June 8 Cash at bank No.600 Credit Date Details Debit 1,490 Discount allowed Date Details June 18 Accounts receivable No.620 Credit Debit Date Details 215 Electricity expense Date Details June 30 Cash at bank No.630 Credit Debit Date Details 210 No.660 Credit Debit Date Details 440 Postage and stationery expense Date Details June 5 Cash at bank Wages expense Date Details June 30 Cash nk 30 PAYG withholding payable No.690 Credit Debit Date Details 760 60 Accounts receivable subsidiary ledger Credit Debit 4,250 500 3,750 Academy Diving School Date Explanation June 12 Invoice 24 Adjustment note 27 Receipt Serious Fun Date Explanation June 13 Invoice 18 Receipt 26 Invoice Surfng World Date Explanation June 11 Invoice Credit Debit 4,300 Acct code: ADI Balance 4,250 Dr 3,750 Dr 0 Acct code: SFU Balance 4,300 Dr 0 7,100 Dr Acct code: SWO Balance 7,150 Dr 4,300 7,100 Debit Credit 7,150 Accounts payable subsidiary ledger Debit Credit 21,900 5,400 Excitement Plus Date Explanation June 2 Invoice 25 Payment Surf Imports Date Explanation June 7 Invoice 8 Payment 27 Invoice Acct code: EPL Balance 21,900 16,500 Acct code: SIM Balance 18,200 0 7,200 Debit Credit 18,200 18,200 7,200 Skate 'n' Surf Trial balance as at 30 June 20XX Debit Account no. Account Credit $ $ 9