SkatesOn began operations on 1 June, buying and selling skateboards, roller blades, scooters and the protective gear that is essential when pursuing these types of sports. The structure of the business is that of a sole trader, with the owner being Jason King. Jason 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 SkatesOn 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		Wages payable
220		PAYG withholding 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		Depreciation expense
610		Discount allowed
620		Insurance expense
630		Interest expense
640		Rent expense
650		Wages expense

Transactions

June	1		The owner opened a bank account for the business with a deposit of $26,200. This is capital provided by him.
	1		Purchased shop equipment (computer, cash register, shelving etc.) from Shop Outfitters Pty Ltd for $48,720. This was paid for with a loan of $43,390 from the bank and cheque for $5,330 from the business bank account. The bank loan is repayable over 4 years.
	2		Purchased inventory (skateboards, roller blades, helmets and other protective gear) from Daintree Importers for $16,951 on terms on net 30.
	2		Paid $3,312 for a 1-year insurance policy covering fire, theft, and public liability.
	3		Paid rent of $2,000 for the shop for June.
	6		Cash sale of a skateboard and protective equipment for $428 (cost of sales $180).
	7		Returned some protective gear to Daintree Importers that was faulty and received an adjustment note (credit note) from them for $145.
	8		Credit sale to Serious Fun of skateboards and roller blades for $6,440 (cost of sales $2,996). This customer was given terms of 5/10, n/30.
	10		Purchased scooters from Scoot Imports for $9,320 on terms of 10/10, n/30.
	14		Paid Daintree Importers $5,000 of the amount owing to them.
	15		Credit sale to Action World of various inventory items for $7,175 (cost of sales $2,990). Terms net 30.
	16		Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount.
	17		Paid Scoot Imports the amount owing to them less the prompt payment discount.
	20		Credit sale to Toys Plus of 28 scooters at a discounted price of $437 each on terms of net 15. Cost of sales $6,060.
	21		Cash sale of inventory to the value of $752 (cost of sales $296).
	22		Issued an adjustment note (credit note) to Action World for 5 helmets at $108 each that were not the style they prefer to sell. The cost of the helmets to us was $44 each and they were put back into inventory.
	24		Paid wages to James Paget the sales assistant of $530 less PAYG Withholding of $42 for the five days he has been employed. In future he will be paid fortnightly.
	27		The owner withdrew $1,000 cash from the business bank account for his own personal use.
	28		Purchased scooters from Scoot Imports for $11,210 on terms of 10/10, n/30.
	29		Received and banked a cheque from Toys Plus for the amount owing by them.
	30		Credit sale to Serious Fun of scooters for $4,930 (cost of sales $1,870). Terms 5/10, n/30.
	30		A repayment of $930 was made on the bank loan.

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.		Wages payable at 30 June were $417.
d.		Interest charged on the bank loan for the month was $176.

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

SkatesOn Statement of profit or loss for the period 1 June to 30 June 20XX
Revenue
Sales revenue
Sales revenue		$31,961
Less: Sales returns and allowances		540
Net sales revenue		31,421
Less: Cost of sales		14,172
Gross profit		17,249
Other revenue:
Discount received		932
		18,181
Expenses
Depreciation expense	$812
Discount allowed	322
Insurance expense	276
Interest expense	176
Rent expense	2,000
Wages expense	947
Total expenses		4,533
Net profit / (loss)		$13,648

Post end-of-year closing entries and complete the closing process in the general ledger. (Leave blank any answer fields that do not require an answer.)

ash at bank							No. 100
Date		Details	Debit	Date		Details	Credit
June	1	Capital	26,200	June	1	Shop equipment (cost)	5,330
	6	Sales revenue	428		2	Prepaid insurance	3,312
	16	Accounts receivable	6,118		3	Rent expense	2,000
	21	Sales revenue	752		14	Accounts payable	5,000
	29	Accounts receivable	12,236		17	Accounts payable	8,388
					24	Wages expense	488
					27	Drawings	1,000
					30	Bank loan	930
	[no answer]	[balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Accounts receivable							No. 110
Date		Details	Debit	Date		Details	Credit
June	8	Sales revenue	6,440	June	16	Cash at bank	6,118
	15	Sales revenue	7,175		16	Discount allowed	322
	20	Sales revenue	12,236		22	Sales returns and allowances	540
	30	Sales revenue	4,930		29	Cash at bank	12,236
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Inventory							No. 120
Date		Details	Debit	Date		Details	Credit
June	2	Accounts payable	16,951	June	6	Cost of sales	180
	10	Accounts payable	9,320		7	Accounts payable	145
	22	Cost of sales	220		8	Cost of sales	2,996
	28	Accounts payable	11,210		15	Cost of sales	2,990
					20	Cost of sales	6,060
					21	Cost of sales	296
					30	Cost of sales	1,870
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Prepaid insurance							No. 130
Date		Details	Debit	Date		Details	Credit
June	2	Cash at bank	3,312	June	30	Insurance expense	276
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Shop equipment (cost)							No. 171
Date		Details	Debit	Date		Details	Credit
June	1	Bank loan	43,390
	1	Cash at bank	5,330
			[no answer]

Accumulated depreciation - shop equipment							No. 172
Date		Details	Debit	Date		Details	Credit
				June	30	Depreciation expense	812

Accounts payable							No. 200
Date		Details	Debit	Date		Details	Credit
June	7	Inventory	145	June	2	Inventory	16,951
	14	Cash at bank	5,000		10	Inventory	9,320
	17	Cash at bank	8,388		28	Inventory	11,210
	17	Discount received	932
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Wages payable							No. 210
Date		Details	Debit	Date		Details	Credit
				June	30	Wages expense	417

PAYG withholding payable							No. 220
Date		Details	Debit	Date		Details	Credit
				June	24	Wages expense	42

Bank loan							No. 230
Date		Details	Debit	Date		Details	Credit
June	30	Cash at bank	930	June	1	Shop equipment (cost)	43,390
					30	Interest expense	176
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Capital							No. 300
Date		Details	Debit	Date		Details	Credit
June	[no answer]	[no answer]	[no answer]	June	1	Cash at bank	26,200
	[no answer]	[no answer]	[no answer]		[no answer]	[no answer]	[no answer]
	[no answer]	[ balance c/d or balance b/d]	[no answer]		[no answer]	[ balance c/d or balance b/d]	[no answer]
			[no answer]				[no answer]
July	[no answer]	[ balance c/d or balance b/d]	[no answer]	July	[no answer]	[ balance c/d or balance b/d]	[no answer]

Drawings							No. 310
Date		Details	Debit	Date		Details	Credit
June	27	Cash at bank	1,000	June	[no answer]	[no answer]	[no answer]

Profit or loss summary							No. 320
Date		Details	Debit	Date		Details	Credit
June	[no answer]	[expenses or revenue]	[no answer]	June	[no answer]	[expenses or revenue]	[no answer]
	[no answer]	[no answer]	[no answer]		[no answer]	[no answer]	[no answer]
			[no answer]				[no answer]

Sales revenue							No. 400
Date		Details	Debit	Date		Details	Credit
June	[no answer]	[no answer]	[no answer]	June	6	Cash at bank	428
					8	Accounts receivable	6,440
					15	Accounts receivable	7,175
					20	Accounts receivable	12,236
					21	Cash at bank	752
					30	Accounts receivable	4,930
			[no answer]				[no answer]

Sales returns and allowances							No. 410
Date		Details	Debit	Date		Details	Credit
June	22	Accounts receivable	540	June	[no answer]	[no answer]	[no answer]

Discount received							No. 420
Date		Details	Debit	Date		Details	Credit
June	[no answer]	[no answer]	[no answer]	June	17	Accounts payable	932

Cost of sales							No. 500
Date		Details	Debit	Date		Details	Credit
June	6	Inventory	180	June	22	Inventory	220
	8	Inventory	2,996		[no answer]	[no answer]	[no answer]
	15	Inventory	2,990
	20	Inventory	6,060
	21	Inventory	296
	30	Inventory	1,870
			[no answer]				[no answer]

Depreciation expense							No. 600
Date		Details	Debit	Date		Details	Credit
June	30	Accumulated depreciation - shop equipment	812	June	[no answer]	[no answer]	[no answer]

Discount allowed							No. 610
Date		Details	Debit	Date		Details	Credit
June	16	Accounts receivable	322	June	[no answer]	[no answer]	[no answer]

Insurance expense							No. 620
Date		Details	Debit	Date		Details	Credit
June	30	Prepaid insurance	276	June	[no answer]	[no answer]	[no answer]

Interest expense							No. 630
Date		Details	Debit	Date		Details	Credit
June	30	Bank loan	176	June	[no answer]	[no answer]	[no answer]

Rent expense							No. 640
Date		Details	Debit	Date		Details	Credit
June	3	Cash at bank	2,000	June	[no answer]	[no answer]	[no answer]

Wages expense							No. 650
Date		Details	Debit	Date		Details	Credit
June	24	Cash at bank	488	June	[no answer]	[no answer]	[no answer]
	24	PAYG withholding payable	42
	30	Wages payable	417
			[no answer]				[no answer]