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 and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier 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 600 Advertising expense 610 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 Transactions June 1 The owner opened a bank account for the business with a deposit of $39,000 This is capital provided by him 1 Purchased display stands, shelving etc (shop equipment) from Shop Displays Pty Ltd for $39,000 and computer equipment for the shop from Computer Wizards for $5,000 These were paid for with a loan of $42,000 from the bank and cheque for $2,000 from the business bank account The bank loan is repayable over 4 years 2 Paid $4,920 for a 1 year insurance policy covering fire, theft, and public liability 2 Paid $1,040 to Local Newspapers for advertising for the shop for the month 5 Purchased inventory (skateboards and protective gear) from Excitement Plus for $27,000 on terms on net 30 7 Purchased surfboards and wetsuits from Surf Imports for $19,000 on terms of 10 10, n 30 8 Credit sale to Serious Fun of skateboards and protective gear for $5,300 (cost of sales $2,100) This customer was given terms of 5 10, n 30 8 Cash sale of a skateboard and protective gear for $540 (cost of sales $240) 11 Cash purchase of postage stamps and stationery from Australia Post for $120 12 Credit sale to Surfing World of various inventory items for $7,990 (cost of sales $4,000) Terms net 30 12 Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $200 13 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount 14 Paid Surf Imports the amount owing to them less the prompt payment discount 17 Credit sale to Academy Diving School of 15 wetsuits at a discounted price of $350 each on terms of net 15 Cost of sales $4,500 23 Paid Excitement Plus $4,300 of the amount owing to them 24 Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $350 each that was not the size they required The cost of the wetsuit to us was $300 and it was put back into inventory 24 Purchased wetsuits from Surf Imports for $9,000 on terms of 10 10, n 30 25 Credit sale to Serious Fun of skateboards for $7,500 (cost of sales $3,600) Terms 5 10, n 30 27 Received and banked a cheque from Academy Diving School for the amount owing by them 30 A repayment of $1,100 was made on the bank loan 30 The owner cashed a cheque for $770 to pay wages to Scott Walker the sales assistant of $800 less PAYG Withholding of $30 The end of month adjustments are below a Depreciation on shop equipment for the month is 20 p a prime cost (straight line) b One twelfth of the insurance expired c Superannuation payable for the month is 10 of the gross wages paid d Interest charged on the bank loan for the month was $160 The transactions above have been journalised and posted The statement or profit or loss for June is below Journalise end of year closing entries (Note Enter debit entries first, followed by credit entries in the general journal Credit account titles are automatically indented when the amount is entered Do not indent manually Leave blank any answer fields that do not require an answer Enter accounts following the order of accounts given in the statement of profit or loss ) Skate 'n' Surf Statement of profit or loss for the period 1 June to 30 June 20XX Revenue Sales revenue Sales revenue 26,580 Less Sales returns and allowances 350 Net sales revenue 26,230 Less Cost of sales 14,140 Gross profit 12,090 Other revenue Discount received 1,900 13,990 Expenses Advertising expense 1,040 Depreciation expense 733 Discount allowed 265 Insurance expense 410 Interest expense 160 Postage and stationery expense 120 Superannuation exepnse 76 Wages expense 800 Total expenses 3,604 Net profit (loss) $10,386 Date Details Post ref Debit Credit 20XX June (To close revenue accounts) (To close expense accounts) (To close profit to capital account)

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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

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 and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier. 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
600		Advertising expense
610		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

Transactions

June	1	The owner opened a bank account for the business with a deposit of $39,000. This is capital provided by him.
	1	Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $39,000 and computer equipment for the shop from Computer Wizards for $5,000. These were paid for with a loan of $42,000 from the bank and cheque for $2,000 from the business bank account. The bank loan is repayable over 4 years.
	2	Paid $4,920 for a 1-year insurance policy covering fire, theft, and public liability.
	2	Paid $1,040 to Local Newspapers for advertising for the shop for the month.
	5	Purchased inventory (skateboards and protective gear) from Excitement Plus for $27,000 on terms on net 30.
	7	Purchased surfboards and wetsuits from Surf Imports for $19,000 on terms of 10/10, n/30.
	8	Credit sale to Serious Fun of skateboards and protective gear for $5,300 (cost of sales $2,100). This customer was given terms of 5/10, n/30.
	8	Cash sale of a skateboard and protective gear for $540 (cost of sales $240).
	11	Cash purchase of postage stamps and stationery from Australia Post for $120.
	12	Credit sale to Surfing World of various inventory items for $7,990 (cost of sales $4,000). Terms net 30.
	12	Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $200.
	13	Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount.
	14	Paid Surf Imports the amount owing to them less the prompt payment discount.
	17	Credit sale to Academy Diving School of 15 wetsuits at a discounted price of $350 each on terms of net 15. Cost of sales $4,500.
	23	Paid Excitement Plus $4,300 of the amount owing to them.
	24	Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $350 each that was not the size they required. The cost of the wetsuit to us was $300 and it was put back into inventory.
	24	Purchased wetsuits from Surf Imports for $9,000 on terms of 10/10, n/30.
	25	Credit sale to Serious Fun of skateboards for $7,500 (cost of sales $3,600). Terms 5/10, n/30.
	27	Received and banked a cheque from Academy Diving School for the amount owing by them.
	30	A repayment of $1,100 was made on the bank loan.
	30	The owner cashed a cheque for $770 to pay wages to Scott Walker the sales assistant of $800 less PAYG Withholding of $30.

The end of month adjustments are below.

a.	Depreciation on shop equipment for the month is 20% p.a. prime cost (straight line).
b.	One-twelfth of the insurance expired.
c.	Superannuation payable for the month is 10% of the gross wages paid.
d.	Interest charged on the bank loan for the month was $160.

The transactions above have been journalised and posted. The statement or profit or loss for June is below.

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Journalise end-of-year closing entries. (Note: Enter debit entries first, followed by credit entries in the general journal. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Leave blank any answer fields that do not require an answer. Enter accounts following the order of accounts given in the statement of profit or loss.)

Skate 'n' Surf Statement of profit or loss for the period 1 June to 30 June 20XX Revenue Sales revenue Sales revenue 26,580 Less: Sales returns and allowances 350 Net sales revenue 26,230 Less: Cost of sales 14,140 Gross profit 12,090 Other revenue: Discount received 1,900 13,990 Expenses Advertising expense 1,040 Depreciation expense 733 Discount allowed 265 Insurance expense 410 Interest expense 160 Postage and stationery expense 120 Superannuation exepnse 76 Wages expense 800 Total expenses 3,604 Net profit/(loss) $10,386 Date Details Post ref. Debit Credit 20XX June (To close revenue accounts) (To close expense accounts) (To close profit to capital account)