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

Journalise end-of-year closing entries. (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.)

Post Date Description 20XX June T (To close revenue accounts) (To close expense accounts) (To close profit to capital account) (To close drawings to the capital account) Debit Credit