You will use the following five weeks of transactions as you complete the books for June. Note that the transactions are divided into five separate weeks. This is because you will not enter this whole list of transactions in any one page. You will be given five separate pages in which to enter the transactions for that week for each of the five weeks.

Adjusting entries information

Using the following information, you will record end of month adjustments:

Office Furniture owned by the business: original purchase price was $8,000, estimated useful life was 6 years, and estimated residual value was $500 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.

Office Equipment owned by the business: original purchase price was $35,000, estimated useful life was 10 years, and estimated residual value was $4,500 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.

The water usage for the month of June is estimated to be $114.

The estimated electricity payable as at the end of June is $288.

Sales staff work every single day during the week including weekends and are paid on a weekly basis. Wages were last paid up to and including 24 June. Wages incurred after that day (from June 25 to June 30 inclusive) are estimated to have been $300 per day.

Interest expense incurred during the month of June but not yet paid to MRMC Bank for the bank loan is $290.

Office supplies totaling $2,684 are still on hand at June 30.

One month of prepaid rent expired during June. Remember that at the beginning of June, the business paid two month's worth of rent in advance.

3 months of advertising remained pre-paid at the start of June.

5 months of insurance remained pre-paid at the start of June.

When calculating the portion of prepayments that expire during the month of June, you are asked to assume that an equal amount of expense is incurred per month.

After taking a physical count of inventory at the end of the month, the balance of inventory on hand as at June 30 is found to be equal to the closing balance of the Merchandise Inventory account. This means there is no adjusting entry required for inventory shrinkage.

Schedule of accounts receivable ~ May

Choco Holly Schedule of Accounts Receivable May 31, 2022

Account No.	Name	Debit ($)	Credit ($)
110-1	ARC - Sugar-hi	4,490
110-2	ARC - Candy Man	3,141
110-3	ARC - Mercury Square	13,220
110-4	ARC - Central Candy	4,233
110-5	ARC - Candy Rush	2,749
110-6	ARC - Sweet Tooth	2,148
Total		29,981

Please note: Choco Holly does not generally give a discount for early payment except in exceptional circumstances. All debtors are on net 30 credit terms.

Schedule of accounts payable ~ May

Choco Holly Schedule of Accounts Payable May 31, 2022

Account No.	Name	Debit ($)	Credit ($)	Terms
210-1	APC - East Tangiers Cooperative		4,372	2/10, n/30
210-2	APC - Brennan Imports Group		4,677	1/15, n/30
210-3	APC - Restlay		28,968	net 30
210-4	APC - Spud's Confectionery		2,612	2/10, n/30
210-5	APC - Gillard Wholesalers		3,066	net 30
210-6	APC - Hershel's		2,745	net 30
Total			46,440

Bank statement ~ June

Miami branch

Rosaline Bragg 96 Buchanan Avenue Miami, FL 33109

Account No.

40376037

Page No.

1

Choco Holly

Date

Particulars

Debit

Credit

Balance

JUN 1

BALANCE BROUGHT FORWARD

$76,866 CR

JUN 2

DEPOSIT - Sugar-hi

$1,200

$78,066 CR

JUN 3

460

$730

$77,336 CR

JUN 4

462

$9,400

$67,936 CR

JUN 4

LOAN

$58,000

$125,936 CR

JUN 4

459

$6,300

$119,636 CR

JUN 6

DEPOSIT - Candy Rush

$2,749

$122,385 CR

JUN 6

DEPOSIT - Central Candy

$3,027

$125,412 CR

JUN 7

463

$1,639

$123,773 CR

JUN 8

461

$2,745

$121,028 CR

JUN 10

466

$4,677

$116,351 CR

JUN 10

465

$535

$115,816 CR

JUN 11

464

$831

$114,985 CR

JUN 12

DEPOSIT - Sugar-hi

$4,041

$119,026 CR

JUN 12

467

$1,539

$117,487 CR

JUN 16

469

$4,372

$113,115 CR

JUN 16

DEPOSIT - Cash sales

$7,680

$120,795 CR

JUN 17

468

$3,066

$117,729 CR

JUN 17

DEPOSIT - Sweet Tooth

$1,000

$118,729 CR

JUN 19

NSF CHECK - Sweet Tooth

$1,000

$117,729 CR

JUN 19

470

$2,270

$115,459 CR

JUN 24

DEPOSIT - Cash sales

$26,752

$142,211 CR

JUN 26

471

$2,407

$139,804 CR

JUN 28

DEPOSIT - Cash sales

$20,520

$160,324 CR

JUN 30

DEPOSIT - Central Candy

$4,233

$164,557 CR

JUN 30

DEPOSIT - Cash sales

$13,824

$178,381 CR

JUN 30

INTEREST

$603

$178,984 CR

JUN 30

SERVICE CHARGE

$10

$178,974 CR

Last statement to 05/31/22

This statement to 06/30/22

Total debits

$41,521

Total credits

$143,629

Final balance

$178,974 CR

Now that you have reviewed information about Choco Holly, you are ready to begin the first step in the accounting cycle, recording transactions. On this page of the practice set, you are asked to record transactions that occurred during the first week of June into the company's journals and post the appropriate entries to the ledger accounts. The following transactions occurred throughout the first week of June:

Week 1
Date	Transaction description
1	Paid the full amount owing to Hershel's, Check No. 461.
1	Issued Check No. 462 for $9,400 to pay Advanced Property Management for two month's worth of rent in advance.
1	Obtained a loan of $58,000 from MRMC Bank 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, 2025.
4	Candy Rush paid the full amount owing on their account.
4	Paid sales staff wages of $1,639 for the week up to and including yesterday, Check No. 463. Note that $1,137 of this payment relates to the wages expense incurred during the last week of May.
5	Made payment of $831 to Enroff for 3 months of electricity up to and including May 31, Check No. 464.
6	Issued Check No. 465 to Office Supplies Warehouse for the purchase of $535 worth of office supplies.

After completing this practice set page, you should know how to record basic transactions in the journals provided below and understand the posting process in the manual accounting system. Note that you will record the remaining June transactions in the following sections of this practice set.

Remember, one purpose of using special journals is to make the posting process more efficient by posting the total of most columns in the special journals after all of the transactions for the period have been recorded. However, some parts of a journal entry are still required to be posted on a daily basis. View the company's accounting policies and procedures for details of what is to be posted daily or monthly.

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 policies and procedures.

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.

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 amount, subtract the discount from the original amount.

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