unadjusted trial balance, adjustment , adjusted trial balance, general journal, general ledger

After some thorough investigation Max has decided to establish a manual double entry accounting system which will employ specialised journals and control accounts (these will be discussed in detail in week 3). Max's record keeping has not always been the best and as a result all Max can provide you with is the unadjusted trial balance on the next page and the following additional information Additional Information The following adjustments were due to be made on balance day of June 30: (a) Max has noticed that his overdraft is getting quite close to its $7,000 limit and arranged with the bank manager to increase this limit to $10,000 on June 2. ()) The June 10 the regular principal repayment of $500 off the Bank Loan was made, but has not yet been recorded (c) Bank Fees of $20, which the bank took directly from the business' bank account during June, have not yet been recorded in the books of the business (d) All depreciation is calculated by the straight-line method. The E-Lift Hoist is expected to have a useful life of 10 years with a scrap value of $300 Histools are expected to be useful for 10 years with a scrup value collectively of $250, and the office equipment is expected to last 5 years and have no residual value. The van was just purchased on June 25. le) 5800 of the business debtors relates to money owed by Dwayne Rock who is applying for bankruptcy. It is unlikely that any of the money will be recovered The proped intrance relates to profesional negligence insurance that Max took out for his business in case he doesn't install an engine system properly and causes damage to a client's vehicle. It is a mal policy that commenced on June 5) The telephone account for the month of June arrives as you we preparing the worksheet. It reveals that 5440 of telephone calls were made on the business Telephone of which Max estimates so were pencal calls. This account has not yet been paid for 4) The Engine Supplies on hand at 30 June had cost $640 In addition Max inform you that the amount owing from Trade Debtos is comprised of the Sollowing companies Michelle Ortiz - 52,376 Chaline That. 3.20 Dwayne Rock. O Vin Walker - 55,450 Paul Diesel - 54.641 Max's Trade Creditors we comprised of UpM-57.500 Total lingine Solutions - 50 At present Marcely some type of investory I FATMAX CASE STUDY TOPIC Required 2 Celle Ilye Cafe comples 1. Mes Tory-Partit for the year and 10 June Ne CF BAS 14 ABSCode AaBbcc AaBt Heading 1 Headi Emphasis FATMAX SE STUDY: TOPIC CASE STUDY 2 - Establishing a new accounting system Having successfully operated his business for 3 years using what he leamed in the UniSA core course, Accounting for Business, Max has decided it is time to develop a more productive mccounting system. In order to do this, Max has been reviewing the notes he took when studying Financial Accounting 1. In his first week of FA I Max discovered that it is important to establish an accounting system that is best suited to the needs of the business Max recalls that it was important to consider a number of factors including the current position of the business and where it may be headed in the future. After some thorough investigation Max has decided to establish a manual double entry accounting system which will employ specialised journals and control accounts (these will be discussed in detail in week 3). Max's record keeping has not always been the best and as a result all Max can provide you with is the unadjusted trial balance on the next page and the following additional information Additional Information: The following adjustments were due to be made on balance day of June 30 (a) Max has noticed that his overdraft is getting quite close to its $7.000 limit and arranged with the bank manaper to increase this limit to $10,000 on June 2. (b) The June 10 the regular principal repayment of $500 off the Bank Loan was made, but has not yet been recorded. (c) Bank Fees of S20, which the bank took directly from the business' bank account during June, have not yet been recorded in the books of the business (d) All depreciation is calculated by the straight-line method. The Ed-Lift Hoist is expected to have a useful life of 10 years with a scrap value of $300. His tools are expected to be useful for 10 years with a scrap value collectively of $250, and the office equipment is expected to last 5 years and have no residual value. The van was just purchased on June 25 (e) $800 of the business' debtors relates to money owed by Dwayne Rock who is applying for bankruptcy. It is unlikely that any of the money will be recovered. (1) The prepaid insurance relates to professional negligence insurance that Max took out for his business in case he doesn't install an engine system properly and causes damage to a client's vehicle. It is an annual policy that commenced on 1 June. () The telephone account for the month of June 30 arrives as you are preparing the worksheet It reveals that S440 of telephone calls were made on the business telephe which Max estimates 560 were personal calls. This account has not yet been paid for. (h) The Engine Supplies on hand at 30 June had cost $640. In addition Max informs you that the amount owing from Trade Debtors is comprised of the following companies Michelle Ortiz - 52,376 Chalice Thrust - $3,250 Dwayne Rock - SRO Vin Walker - 55.450 Paul Diesel - $4,641 Max's Trade Creditors are comprised of Unplugged Ltd - $2,500 Total Engine Solutions. So At present Max only has one type of inventory FAT MAX CASE STUDY: TOPIC 2 Required 1. You need to complete the adjustment provided in the additional information on the worksheet provided and as general journal entries. Then give cach account an appropriate chart of account number 2 Calculate the profit for the previous period and then calculate the Capital figure as at 1 July (ready for the start of the next year) 3. Using the figures from the adjusted trial balance you must complete an opening entry to establish Max's new accounting system in the General Journal and then post this entry to the appropriate ledger accounts. 4. inter any required reversing entries in the general jamal to prepare the new system for use and post there entries appropriately 1. Max Acmim Torque-Partial worksheet for the year ended 30 June Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Name No DI Cr DE Cr DI Cr Cash at Bank 100 6,435 Trade Debtors 110 16,317 Inventory 120 2,980 Prepaid Insurance 130 1,500 Engine Supplies 133 790 Van 160 22.000 Ex-Lin Hoist 140 3,600 Ace. Danto-Ex-LiA Hoist 141 275 Office Equipment 150 660 Ace Deto.-on Equip 151 Tools 170 2,500 Acc. Dana-Tools 171 694 Trade Crediton 200 2.500 Bank Loan 220 14.500 Capital - 300 10,814 Sales 400 49,610 Turbo Installation Revenue 410 15,720 Cost of Goods Sold 500 28,50 Operating Expenses 590 15,334 Advertising Expense SID 2.520 Interest Expense 530 1,406 Telephone Expenses 512 2,260 100,647 100,647 FAI-MAX CASE STUDY: TOPIC 2 4. Max Armim. Torque-General Ledger Date Details CASH AT BANK (100) $ Date July 1 Details Opening Entry s 6,955 Date Details TRADE DEBTORS (110 $ Date Details s Date ALLOWANCE FOR DOUBTFUL DEBTS (111) Details Date Details $ Date INVENTORY (120) $ Date Details Details PREPAID INSURANCE (130 Date Date Details Details S Date Details Engine Supplies (133) $ Date Details $ Date Details DELIVERY VAN (160) Date Details AaBb CODE AaBbcc AaBbcc Heading 1 Heading 2 Emphasis I FAIMAX CASE STUDY: TOPIC 2 EZI-LIFT HOLST (140 $ Date Date Details Details $ Date ACCUMULATED DEPRECIATION - EZI-LIFT HOIST (141) Details $ Date Details $ Date Details OFFICE EQUIPMENT (150) Date Details $ ACCUMULATED DEPRECIATION-OFFICE EQUIPMENT (151) Date Details Date Date Details TOOLS (170) Date Details $ Dane ACCUMULATED DEPRECIATION - TOOLS (171) Details Date Details Date Details TRADE CREDITORS.C.00 Dute Review View E LabCode AaBbcc AaBb CcD Heading 1 Heading 2 Emphasis I FAI-MAX CASE STUDY: TOPIC 2 BANK LOAN (220) $ Date Date Details Details $ Date Details CAPITAL -MAX (10) $ Dute Details Date ACCRUFD TELEPHONE EXPENSE (205) Details Date Details Date TELEPHONE EXPENSE (512) Dute Details 1 Date Date Details Date Details Date Details