Week 1

June 1 Obtained a loan of $48,000 from BitiBank at a simple interest rate of 6% per year. The first interest payment is due at the end of August 2022 and the principal of the loan is to be repaid on June 1, 2026.

June 2 Purchased 15 White Water Rafts from Sports 'R Us for $360 each, terms net 30.

June 4 Paid the full amount owing to Sport Borders, Check No. 795. Payment fell outside discount period.

June 4 Purchased 28 Bungee Kits with cash for $200 each, Check No. 796.

June 5 Purchased 13 Melon Watt Skateboards from Extreme Sports Inc for $160 each, terms 2/10, n/30

June 5 Sold 16 White Water Rafts to Balls 'n All for $620 each, plus 5% sales tax, Invoice No. 386.

June 5 Paid sales staff wages of $1,746 for the week up to and including yesterday, Check No. 797. Note that $1,000 of this payment relates to the wages expense incurred during the last week of May.

June 6 Paid the full amount owing to Hike, Check No. 798. Payment fell outside discount period.

June 6 Made cash sale of 31 Bungee Kits for $500 each plus 5% sales tax.

Additional Info: Accounts Payable balance 77,574 (credit) & Accounts receivable 71,101 (Debit), Collects 5% sales tax on all items sold to customer. Perpetual Inventory System FIFO Method, Straight line method for depreciation

Instructions for week 1

1)Record all week 1 transactions in the relevant journals.

Note that special journals must be used where applicable. Any transaction that cannot be recorded in a special journal should be recorded in the general journal.

2)Post entries recorded in the journals to the appropriate ledger accounts according to the company's accounting

Note that the relevant totals of the special journals will be posted to the general ledger accounts at the end of the month. You will enter this before you prepare the Bank Reconciliation Statement.

3)Update inventory cards on a daily basis.

Remember to enter all answers to the nearest whole dollar. When calculating a discount, if a discount is not a whole number, round the discount to the nearest whole dollar. Then, to calculate the cash at bank amount, subtract the discount from the original amount.

Journals:

Each transaction recorded in a special journal must be entered in one line. In order to receive full points, you must not split up the relevant transaction into more than one line in the special journal.

For certain transactions in special journals, some accounting textbooks do not always require an account to be chosen under the column labeled Account. In this practice set you are required to select an account for each transaction in the special journals. Specifically, in all special journals, under the column labeled Account, you must select the correct account name for each transaction in order to receive full points. Note that for some transactions, this will mean that the account name selected will correspond to the heading of one of the columns in that special journal.

For each journal, in the Post Ref. column you will need to correctly type the account number of the account you are posting to. In particular, in special journals, some accounting textbooks do not always require a reference to be recorded in the Post Ref. column. In this practice set, in order to receive full points, every transaction entered in a special journal requires an entry in the Post Ref. column. Note that in the special journals, if the account name selected for a transaction corresponds to the heading of one of the columns in that special journal, the post ref is to be recorded as an X. This is because these transactions are not posted on a daily basis. In order to receive full points, you must record only the letter X in the Post Ref. column for these transactions.

Note that in special journals, the Other Accounts column should not be used to record movements of inventory.

There may be entries in the general journal that require posting to both a control account and a subsidiary ledger. In these cases, after you have posted to both ledgers, you should enter the reference for both the general ledger account and the subsidiary ledger account in the Post Ref. column to indicate that you have posted to both accounts. For example, if the reference number for the control account is 110 and the reference number for the subsidiary ledger account is 110-1, you should type '110/110-1' into the Post Ref. column.

General journal entries do NOT require a description of the journal entries.

Ledgers:

When posting a transaction to a ledger account, under the Description column, please type the description of the transaction directly into the field. The exact wording does not matter for grading purposes. For example, it does not matter in an electricity transaction if you type 'Paid for electricity' or 'Paid electricity bill'.

For each ledger, under the Ref. column, you need to select the correct journal from a list in the drop-down box provided in order to receive full points.

If the balance of a ledger account is zero you do not need to select a debit or credit from the drop-down box.

Each transaction posted to the subsidiary ledgers must be entered in one line. In order to receive full points, you must not split up the relevant transaction into more than one line in the subsidiary ledger.

Both journals and ledgers:

Most journals and ledgers will have blank rows left at the end of this question.

Some journals and ledgers may not require any entries for this week.

When purchases and sales are recorded in special journals, the corresponding changes in inventory must not be posted to the Merchandise Inventory account in the general ledger on a daily basis.

Inventory cards:

Each transaction recorded in the inventory cards must be entered in a pair of lines provided. You may be required to record a transaction in a single line or two separate lines within the pair of lines provided. Whether one or two lines are required depends on the unit costs of the items involved in that transaction. If a transaction involves items with the same unit cost, you must record that transaction in a single line. Alternatively, if those items have two different unit costs, you are required to use a separate line within the pair of lines provided for each different unit cost.

In order to receive full points, you must not combine two transactions into the one pair of lines. See the Inventory cards ~ May popup below the 'Information from previous pages' heading for an example of how inventory cards are to be completed.

Note that you may enter a positive or negative number into the Units and Total Cost columns but all unit costs must be entered as positive numbers into the Unit Cost columns.

\begin{tabular}{|l|l|l|l|l|l|} \hline Show All & Special Journals & General Journal & Subsidiary Ledgers & General Ledger & Inventory \\ \cline { 2 - 7 } & & \end{tabular} SALES JOURNAL PURCHASES JOURNAL (Q=303.cashReceiptsjournalWeek1) CASH RECEIPTS JOURNAL \begin{tabular}{|l|l|l|l|l|l|} \hline Show All & Special Journals & General Journal & Subsidiary Ledgers & General Ledger & Inventory \\ \cline { 2 - 7 } & & \end{tabular} SALES JOURNAL PURCHASES JOURNAL (Q=303.cashReceiptsjournalWeek1) CASH RECEIPTS JOURNAL