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 $25,300. This is capital provided by him.
	1		Purchased shop equipment (computer, cash register, shelving etc.) from Shop Outfitters Pty Ltd for $44,220. This was paid for with a loan of $40,640 from the bank and cheque for $3,580 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 $18,092 on terms on net 30.
	2		Paid $3,012 for a 1-year insurance policy covering fire, theft, and public liability.
	3		Paid rent of $2,070 for the shop for June.
	6		Cash sale of a skateboard and protective equipment for $424 (cost of sales $174).
	7		Returned some protective gear to Daintree Importers that was faulty and received an adjustment note (credit note) from them for $144.
	8		Credit sale to Serious Fun of skateboards and roller blades for $5,620 (cost of sales $3,023). This customer was given terms of 5/10, n/30.
	10		Purchased scooters from Scoot Imports for $10,530 on terms of 10/10, n/30.
	14		Paid Daintree Importers $5,410 of the amount owing to them.
	15		Credit sale to Action World of various inventory items for $6,097 (cost of sales $2,919). 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 29 scooters at a discounted price of $405 each on terms of net 15. Cost of sales $5,590.
	21		Cash sale of inventory to the value of $707 (cost of sales $318).
	22		Issued an adjustment note (credit note) to Action World for 5 helmets at $103 each that were not the style they prefer to sell. The cost of the helmets to us was $38 each and they were put back into inventory.
	24		Paid wages to James Paget the sales assistant of $550 less PAYG Withholding of $44 for the five days he has been employed. In future he will be paid fortnightly.
	27		The owner withdrew $920 cash from the business bank account for his own personal use.
	28		Purchased scooters from Scoot Imports for $12,090 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 $4,850 (cost of sales $2,170). 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 $373.
d.		Interest charged on the bank loan for the month was $193.

The transactions above have been journalised and posted. The adjusted trial balance is below.

SkatesOn Adjusted trial balance as at 30 June 20XX Debit Credit Aocount no. Aocount Cash at bank $17,610 100 10,432 Accounts receivable 110 120 26,564 Inventory Prepaid insurance 2,761 130 Shop equipment (cost) 44,220 Accumulated depreciation shop equipment $737 172 200 Accounts payable 24,628 Wages payable 210 373 PAYG withholding payable 220 44 39,903 Bank loan 230 Capital 25,300 300 920 Drawings 310 Sales revenue 29,443 400 515 Sales returns and allowances 10 1,053 Discount received 420 Cost of sales 500 14,00 737 Depreciation expense 600 610 Discount allowed 281 251 Insurance expense 620 193 630 Interest expense 640 Rent expense 2,070 650 Wages expense 923 $121,481 $121,481