Transactions

June 1 The owner opened a bank account for the business with a deposit of $40,000. This is capital provided by him.

1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $40,000 and computer equipment for the shop from Computer Wizards for $5,000. These were paid for with a loan of $41,500 from the bank and cheque for $3,500 from the business bank account. The bank loan is repayable over 4 years.

2 Paid $4,200 for a 1-year insurance policy covering fire, theft, and public liability.

2 Paid $1,180 to Local Newspapers for advertising for the shop for the month.

5 Purchased inventory (skateboards and protective gear) from Excitement Plus for $23,000 on terms on net 30.

7 Purchased surfboards and wetsuits from Surf Imports for $24,000 on terms of 10/10, n/30.

8 Credit sale to Serious Fun of skateboards and protective gear for $5,400 (cost of sales $3,000). This customer was given terms of 5/10, n/30.

8 Cash sale of a skateboard and protective gear for $540 (cost of sales $200).

11 Cash purchase of postage stamps and stationery from Australia Post for $180.

12 Credit sale to Surfing World of various inventory items for $7,930 (cost of sales $4,900). Terms net 30.

12 Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $160.

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 16 wetsuits at a discounted price of $370 each on terms of net 15. Cost of sales $5,120.

23 Paid Excitement Plus $3,900 of the amount owing to them.

24 Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $370 each that was not the size they required. The cost of the wetsuit to us was $320 and it was put back into inventory.

24 Purchased wetsuits from Surf Imports for $8,500 on terms of 10/10, n/30.

25 Credit sale to Serious Fun of skateboards for $8,000 (cost of sales $3,900). 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 $900 was made on the bank loan.

30 The owner cashed a cheque for $960 to pay wages to Scott Walker the sales assistant of $1,000 less PAYG Withholding of $40.

The end of month adjustments are below.

a. Depreciation on shop equipment for the month is 10% 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 $150.

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

Skate 'n' Surf

Statement of profit or loss

for the period 1 June to 30 June 20XX

Revenue

Sales revenue

Sales revenue 27,790

Less: Sales returns and allowances 370

Net sales revenue 27,420

Less: Cost of sales 16,800

Gross profit 10,620

Other revenue:

Discount received 2,400

13,020

Expenses

Advertising expense 1,180

Depreciation expense 375

Discount allowed 270

Insurance expense 350

Interest expense 150

Postage and stationery expense 180

Superannuation exepnse 95

Wages expense 1,000

Total expenses 3,600

Net profit/(loss) $9,420

Collapse question part

(a)

Partially correct answer. Your answer is partially correct.

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.)

Date

Details

Post ref.

Debit

Credit

20XX

June

Entry field with correct answer

Entry field with correct answer

Sales revenue

Entry field with incorrect answer

27420

Entry field with correct answer

Entry field with correct answer

Discount received

Entry field with correct answer

2400

Entry field with correct answer

Entry field with correct answer

Profit or loss summary

Entry field with correct answer

Entry field with incorrect answer

29820

(To close revenue accounts)

Entry field with correct answer

Entry field with correct answer

Profit or loss summary

Entry field with incorrect answer

20400

Entry field with correct answer

Entry field with correct answer

Cost of sales

Entry field with correct answer

Entry field with correct answer

16800

Entry field with correct answer

Advertising expense

Entry field with correct answer

Entry field with correct answer

1180

Entry field with correct answer

Depreciation expense

Entry field with correct answer

Entry field with correct answer

375

Entry field with correct answer

Discount allowed

Entry field with correct answer

Entry field with correct answer

270

Entry field with correct answer

Insurance expense

Entry field with correct answer

Entry field with correct answer

350

Entry field with correct answer

Interest expense

Entry field with correct answer

Entry field with correct answer

150

Entry field with correct answer

Postage and stationery expense

Entry field with correct answer

Entry field with correct answer

180

Entry field with correct answer

Superannuation expense

Entry field with correct answer

Entry field with correct answer

95

Entry field with correct answer

Wages expense

Entry field with correct answer

Entry field with correct answer

1000

Entry field with incorrect answer

Entry field with incorrect answer

Entry field with incorrect answer

(To close expense accounts)

Entry field with correct answer

Entry field with correct answer

Profit or loss summary

Entry field with correct answer

9420

Entry field with correct answer

Entry field with correct answer

Capital

Entry field with correct answer

Entry field with correct answer

9420

(To close profit to capital account)

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Attempts: 1 of 1 used

Collapse question part

(b)

Post end-of-year closing entries and complete the closing process in the general ledger.

(Note: Leave blank any answer fields that do not require an answer.)

Cash at bank No. 100

Date Details Debit Date Details Credit

June 1 Capital 40,000 June 1 Shop equipment (cost) 3,500

8 Sales revenue 540 2 Prepaid insurance 4,200

13 Accounts receivable 5,130 2 Advertising expense 1,180

27 Accounts receivable 5,550 11 Postage and stationery 180

14 Accounts payable 21,600

23 Accounts payable 3,900

30 Bank loan 900

30 Wages expense 960

$

$

July

July

Accounts receivable

No. 110

Date Details Debit Date Details Credit

June 8 Sales revenue 5,400 June 13 Cash at bank 5,130

12 Sales revenue 7,930 13 Discount allowed 270

17 Sales revenue 5,920 24 Sales returns and allowances 370

25 Sales revenue 8,000 27 Cash at bank 5,550

$

$

July

July

Inventory

No. 120

Date Details Debit Date Details Credit

June 5 Accounts payable 23,000 June 8 Cost of sales 200

7 Accounts payable 24,000 8 Cost of sales 3,000

24 Cost of sales 320 12 Accounts payable 160

24 Accounts payable 8,500 12 Cost of sales 4,900

17 Cost of sales 5,120

25 Cost of sales 3,900

$

$

July

July

Prepaid insurance

No. 130

Date Details Debit Date Details Credit

June 2 Cash at bank 4,200 June 30 Insurance expense 350

$

$

July

July

Shop equipment (cost)

No. 171

Date Details Debit Date Details Credit

June 1 Bank loan 41,500

1 Cash at bank 3,500

$45,000

Accumulated depreciation - shop equipment

No. 172

Date Details Debit Date Details Credit

June 30 Depreciation expense 375

Accounts payable

No. 200

Date Details Debit Date Details Credit

June 12 Inventory 160 June 5 Inventory 23,000

14 Cash at bank 21,600 7 Inventory 24,000

14 Discount received 2,400 24 Inventory 8,500

23 Cash at bank 3,900

$

$

July

July

PAYG withholding payable

No. 210

Date Details Debit Date Details Credit

June 30 Wages expense 40

Superannuation payable

No. 220

Date Details Debit Date Details Credit

June 30 Superannuation expense 95

Bank loan

No. 230

Date Details Debit Date Details Credit

June 30 Cash at bank 900 June 1 Shop equipment (cost) 41,500

30 Interest expense 150

$

$

July

July

Capital

No. 300

Date Details Debit Date Details Credit

June

June 1 Cash at bank 40,000

$

Drawings

No. 310

Date Details Debit Date Details Credit

Profit or loss summary

No. 320

Date Details Debit Date Details Credit

June

June

$

$

Sales revenue No. 400

Date Details Debit Date Details Credit

June

June 8 Cash at bank 540

8 Accounts receivable 5,400

12 Accounts receivable 7,930

17 Accounts receivable 5,920

25 Accounts receivable 8,000

$

$

Sales returns and allowances

No. 410

Date Details Debit Date Details Credit

June 24 Accounts receivable 370 June

Discount received

No. 420

Date Details Debit Date Details Credit

June

June 14 Accounts payable 2,400

Cost of sales

No. 500

Date Details Debit Date Details Credit

June 8 Inventory 200 June 24 Inventory 320

8 Inventory 3,000

12 Inventory 4,900

17 Inventory 5,120

25 Inventory 3,900

$

$

Advertising expense

No. 600

Date Details Debit Date Details Credit

June 2 Cash at bank 1,180 June

Depreciation expense

No. 610

Date Details Debit Date Details Credit

June 30 Accumulated depreciation - shop equipment 375 June

Discount allowed

No. 620

Date Details Debit Date Details Credit

June 13 Accounts receivable 270 June

Electricity expense

No. 630

Date Details Debit Date Details Credit

Insurance expense

No. 640

Date Details Debit Date Details Credit

June 30 Prepaid insurance 350 June

Interest expense

No. 650

Date Details Debit Date Details Credit

June 30 Bank loan 150 June

Postage and stationery expense

No. 660

Date Details Debit Date Details Credit

June 11 Cash at bank 180 June

Superannuation expense

No. 670

Date Details Debit Date Details Credit

June 30 Superannuation payable 95 June

Telephone expense

No. 680

Date Details Debit Date Details Credit

Wages expense

No. 690

Date Details Debit Date Details Credit

June 30 Cash at bank 960 June

30 PAYG withholding payable 40

$

$

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