SkatesOn began operations on 1 June, buying and sellingskateboards, roller blades, scooters and the protective gear thatis essential when pursuing these types of sports. The structure ofthe business is that of a sole trader, with the owner being JasonKing.
Jason employed a sales assistant during the month who is to be paidfortnightly. Tax is deducted from the employee’s wages (PAYGwithholding tax) and remitted to the Australian Taxation Office(ATO) on a quarterly basis.
The business has not registered with theATO for the goods and services tax (GST) and has elected to use theaccrual basis of accounting.
Accounting recordsThe business records all transactions in the general journal. Thesetransactions are then posted to the appropriate account(s) in thegeneral ledger and the accounts receivable or accounts payablesubsidiary ledgers, where separate accounts are maintained for eachcustomer or supplier.
Chart of accountsThe chart of accounts for SkatesOn contains the accounts andaccount numbers below.
100
Cash at bank
110
Accounts receivable
120
Inventory
130
Prepaid insurance
171
Shop equipment (cost)
172
Accumulated depreciation – shopequipment
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 thebusiness with a deposit of $26,600. This is capital provided byhim.
1
Purchased shop equipment (computer,cash register, shelving etc.) from Shop Outfitters Pty Ltd for$42,420. This was paid for with a loan of $39,500 from the bank andcheque for $2,920 from the business bank account. The bank loan isrepayable over 4 years.
2
Purchased inventory (skateboards,roller blades, helmets and other protective gear) from DaintreeImporters for $16,489 on terms on net 30.
2
Paid $3,312 for a 1-year insurancepolicy covering fire, theft, and public liability.
3
Paid rent of $2,180 for the shop forJune.
6
Cash sale of a skateboard andprotective equipment for $481 (cost of sales $174).
7
Returned some protective gear toDaintree Importers that was faulty and received an adjustment note(credit note) from them for $159.
8
Credit sale to Serious Fun ofskateboards and roller blades for $6,560 (cost of sales $2,815).This customer was given terms of 5/10, n/30.
10
Purchased scooters from Scoot Importsfor $10,130 on terms of 10/10, n/30.
14
Paid Daintree Importers $4,890 of theamount owing to them.
15
Credit sale to Action World of variousinventory items for $7,128 (cost of sales $2,696). Terms net30.
16
Received a cheque from Serious Fun forthe amount owing by them after deducting the prompt paymentdiscount.
17
Paid Scoot Imports the amount owing tothem less the prompt payment discount.
20
Credit sale to Toys Plus of 29 scootersat a discounted price of $384 each on terms of net 15. Cost ofsales $6,500.
21
Cash sale of inventory to the value of$728 (cost of sales $292).
22
Issued an adjustment note (credit note)to Action World for 5 helmets at $103 each that were not the stylethey prefer to sell. The cost of the helmets to us was $37 each andthey were put back into inventory.
24
Paid wages to James Paget the salesassistant of $470 less PAYG Withholding of $38 for the five days hehas been employed. In future he will be paid fortnightly.
27
The owner withdrew $980 cash from thebusiness bank account for his own personal use.
28
Purchased scooters from Scoot Importsfor $12,360 on terms of 10/10, n/30.
29
Received and banked a cheque from ToysPlus for the amount owing by them.
30
Credit sale to Serious Fun of scootersfor $5,140 (cost of sales $1,880). Terms 5/10, n/30.
30
A repayment of $950 was made on thebank loan.
The end-of-month adjustments are below.
a.
Depreciation on shop equipment for the month is 20% p.a. primecost (straight line).
b.
One-twelfth of the insurance expired.
c.
Wages payable at 30 June were $403.
d.
Interest charged on the bank loan for the month was $175.
The transactions above have been journalised and posted.
Cash at bank
No. 100
Date
Details
Debit
Date
Details
Credit
June
1
Capital
26,600
June
1
Shop equipment (cost)
2,920
6
Sales revenue
481
2
Prepaid insurance
3,312
16
Accounts receivable
6,232
3
Rent expense
2,180
21
Sales revenue
728
14
Accounts payable
4,890
29
Accounts receivable
11,136
17
Accounts payable
9,117
24
Wages expense
432
27
Drawings
980
30
Bank loan
950
Accounts receivable
No. 110
Date
Details
Debit
Date
Details
Credit
June
8
Sales revenue
6,560
June
16
Cash at bank
6,232
15
Sales revenue
7,128
16
Discount allowed
328
20
Sales revenue
11,136
22
Sales returns and allowances
515
30
Sales revenue
5,140
29
Cash at bank
11,136
Inventory
No. 120
Date
Details
Debit
Date
Details
Credit
June
2
Accounts payable
16,489
June
6
Cost of sales
174
10
Accounts payable
10,130
7
Accounts payable
159
22
Cost of sales
185
8
Cost of sales
2,815
28
Accounts payable
12,360
15
Cost of sales
2,696
20
Cost of sales
6,500
21
Cost of sales
292
30
Cost of sales
1,880
Prepaid insurance
No. 130
Date
Details
Debit
Date
Details
Credit
June
2
Cash at bank
3,312
June
30
Insurance expense
276
Shop equipment (cost)
No. 171
Date
Details
Debit
Date
Details
Credit
June
1
Bank loan
39,500
1
Cash at bank
2,920
Accumulated depreciation – shop equipment
No. 172
Date
Details
Debit
Date
Details
Credit
June
30
Depreciation expense
707
Accounts payable
No. 200
Date
Details
Debit
Date
Details
Credit
June
7
Inventory
159
June
2
Inventory
16,489
14
Cash at bank
4,890
10
Inventory
10,130
17
Cash at bank
9,117
28
Inventory
12,360
17
Discount received
1,013
Wages payable
No. 210
Date
Details
Debit
Date
Details
Credit
June
30
Wages expense
403
PAYG withholding payable
No. 220
Date
Details
Debit
Date
Details
Credit
June
24
Wages expense
38
Bank loan
No. 230
Date
Details
Debit
Date
Details
Credit
June
30
Cash at bank
950
June
1
Shop equipment (cost)
39,500
30
Interest expense
175
Capital
No. 300
Date
Details
Debit
Date
Details
Credit
June
1
Cash at bank
26,600
Drawings
No. 310
Date
Details
Debit
Date
Details
Credit
June
27
Cash at bank
980
Sales revenue
No. 400
Date
Details
Debit
Date
Details
Credit
June
6
Cash at bank
481
8
Accounts receivable
6,560
15
Accounts receivable
7,128
20
Accounts receivable
11,136
21
Cash at bank
728
30
Accounts receivable
5,140
Sales returns and allowances
No. 410
Date
Details
Debit
Date
Details
Credit
June
22
Accounts receivable
515
Discount received
No. 420
Date
Details
Debit
Date
Details
Credit
June
17
Accounts payable
1,013
Cost of sales
No. 500
Date
Details
Debit
Date
Details
Credit
June
6
Inventory
174
June
22
Inventory
185
8
Inventory
2,815
15
Inventory
2,696
20
Inventory
6,500
21
Inventory
292
30
Inventory
1,880
Depreciation expense
No. 600
Date
Details
Debit
Date
Details
Credit
June
30
Accumulated depreciation – shop equipment
707
Discount allowed
No. 610
Date
Details
Debit
Date
Details
Credit
June
16
Accounts receivable
328
Insurance expense
No. 620
Date
Details
Debit
Date
Details
Credit
June
30
Prepaid insurance
276
Interest expense
No. 630
Date
Details
Debit
Date
Details
Credit
June
30
Bank loan
175
Rent expense
No. 640
Date
Details
Debit
Date
Details
Credit
June
3
Cash at bank
2,180
Wages expense
No. 650
Date
Details
Debit
Date
Details
Credit
June
24
Cash at bank
432
24
PAYG withholding payable
38
30
Wages payable
403
Prepare an adjusted trial balance.
AOOount no. Aocount SkatesOn Adjusted trial balance as at 30 June 20XX Debit Credit Show transcribed image text AOOount no. Aocount SkatesOn Adjusted trial balance as at 30 June 20XX Debit Credit
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