BENCHTOP STOVES R.US.
508 Darling St., Moonee Ponds VIC. 3039
TIM TIDY, a semi-retired cleaner started a retail business on 1 July 2015, supplying two grades Bench top stoves for office cleaning purposes. They are A1. BENCHTOP STOVES and DELUX BENCHTOP STOVES . As most of his customers are city offices, Tim is not required to provide delivery services. Therefore, he did not have to invest in motor vehicles. Instead, she invested in equipment for servicing the bench top stoves by paying $20,000 cash on the day of commencement of business.
Tim sees great potential in this business and endeavours to maintain double entry accounting records. It has been two months since the start of business and now, he has engaged your service as an accountant to develop the double entry recording system.
As there are small expenses paid directly by Tim, you recommended a Petty Cash Advance be established and a Petty Cash Book maintained.
The trial balance below shows the summary of transactions in the first two months of business, now carried forward to the 1st of SEPTEMBER 2015.
BENCHTOP STOVES R.US.
TRIAL BALANCE AS AT 1 SEPTEMBER 2015
ACCOUNT DEBIT $ CREDIT $
Cash at bank 30,640
Accounts Receivable 93,000
Inventory
A1. Benchtop Stoves 30,000
Delux Benchtop Stoves 10,000
Equipment (paid cash on 1 July 2015) 20,000
Accounts Payable 50,000
Loan from Sunny Bank Ltd 83,340
Capital – TIM TIDY 40,000
Drawings – TIM TIDY 10,000
Sales 132,000
Cost of Sales – A1. Benchtop Stoves 60,000
Cost of Sales – Delux Benchtop Stoves 30,000
Electricity expense 3,000
Equipment Running Costs 400
Insurance expense – Equipment 600
Interest expense 2,000
Office Supplies 300
Rent expense 12,000
Telephone expense 400
Wagesexpense 3,000
TOTAL $ 305,340 $ 305,340
Information relating to opening trial balance:
1. The Purchases and Sales history for the past two months is as follows:
Purchases Sales
A1. BENCHTOP STOVES 150 @ $600 each 100 @ $900 each
DELUX BENCHTOP STOVES 40 @ $1,000 each 30 @ $1,400 each
NOTE: Purchases and Sales are a combination of cash and credit transactions.
Inventory balances as at 1st September:
A1. BENCHTOP STOVES 50 @ $600 each
DELUX BENCHTOP STOVES 10 @ $1,000 each
Cost of Sales for two months ending 31st August 2015
A1. BENCHTOP STOVES 100 @ $600 each
DELUX BENCHTOP STOVES 30 @ $1,000 each
2. FIFO method of accounting for inventory is used.
3. Accounts Receivable as at 1 SEPTEMBER 2015 consisted of:
Top Shelf Ltd $45,000
Real Deal Ltd $48,000
4. Accounts Payable as at 1 SEPTEMBER 2015 consisted of:
Keener Prices Ltd $50,000
5. Loan from Centrality Banking Corp. for the amount of $100,000 was effective from 1 July 2015. Interest rate of 12% per annum applies. An amount of $9,330 per month is payable on the last day of each month, of which, $8,330 accounts for loan repayment and $1,000 accounts for interest expense.
CENTRALITY BANKING CORPORATION
Moonee Ponds, Victoria
SEPTEMBER 2015 Statement |
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Particulars |
Debit $ |
Credit $ |
Balance $ |
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1 SEPTEMBER Open. Balance 1 SEPTEMBER Cheque No. 119 6 SEPTEMBER Cheque No.120 12 SEPTEMBER C&C 16 SEPTEMBER Cheque No. 122 17 SEPTEMBER C&C 18 SEPTEMBER Cheque No. 121 20 SEPTEMBER Cheque No. 124 26 SEPTEMBER Cheque No. 126 28 SEPTEMBER Cheque No.123 29 SEPTEMBER Cheque No.128 30 SEPTEMBER Bank Fees |
200 300
1000
50,000 1,000 170 300 1,000 30 |
48,000
8,400
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30,640 30,440 30,140 78,140 77,140 85,540 35,540 34,450 34,370 34,070 33,070 33,040 |
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Date of Issue: 30 SEPTEMBER 2015 |
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TRANSACTIONS FOR THE MONTH OF SEPTEMBER 2015
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1 SEPTEMBER |
Drew Cheque no. 119 to establish Petty Cash Advance of $200. |
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1 SEPTEMBER |
Paid Insurance on Equipment by Cheque no. 120 for the amount of $300. |
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2 SEPTEMBER |
Purchased 100 A1. Benchtop Stoves on credit from Keener Prices Ltd at $660 each – Invoice no. 16110. |
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4 SEPTEMBER |
Returned 2 defective A1. Benchtop Stoves that were purchased from Keener Prices Ltd on 2nd of SEPTEMBER 2015. |
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5 SEPTEMBER |
Received $48,000 from customer, Real Deal Ltd – Receipt No.12 was issued. |
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8 SEPTEMBER |
Sold 80 A1. Benchtop Stoves @ $900 each to Sally Ltd on credit – Invoice No 10003. |
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9 SEPTEMBER |
Paid $50 for plastic covers from petty cash – voucher no. 1 was raised. |
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10 SEPTEMBER |
Sold 6 Delux Benchtop Stoves for $8,400 to customer, Handy Andy Ltd who paid cash, online, direct into bank account. Receipt no. 13 was issued. |
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11 SEPTEMBER |
Paid supplier Keener Prices Ltd by Cheque no. 121 for the amount of $50,000. |
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13 SEPTEMBER |
Paid $120 for signage from petty cash – voucher no. 2 was raised. |
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15 SEPTEMBER |
Paid wages by Cheque no. 122 for the amount of $1,000. |
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18 SEPTEMBER |
Paid Electricity account by Cheque no. 123 for the amount of $300. |
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20 SEPTEMBER |
Tim Tidy, the owner withdrew $1,000 for personal use by Cheque no. 124. |
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21 SEPTEMBER |
Purchase 20 Delux Benchtop Stoves from a new supplier – Happy Customers Ltd, for $990 each. |
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23 SEPTEMBER |
Sold 8 Delux Benchtop Stoves to a new customer – Heady Prices Ltd for $1,450.00 each, Invoice No 1004. Paid $170 to Real Oils by Cheque No. 125 for lubricating oil for equipment. |
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26 SEPTEMBER |
Reimbursed petty cash with Cheque no. 126.
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27 SEPTEMBER |
Paid $240 to Voda by Cheque No.127 for telephone services. Purchase 4 A1Benchtop Stoves from Heady Prices Ltd for $610 each |
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28 SEPTEMBER |
Paid wages by Cheque no. 128 for the amount of $1,000. |
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29 SEPTEMBER |
Received $44,100 from customer, Top Shelf Ltd and 2% discount was allowed for early payment – Receipt No. 14 was issued. |
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29 SEPTEMBER |
Paid Rent for October with Cheque no. 129 for the amount of $4,000. Using the asset method |
ADDITIONAL INFORMATION AS AT 30 SEPTEMBER 2015
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Equipment is to be depreciated on a reducing balance at 12% per annum.
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Repayment of Loan from Centrality Banking Corp for the month of SEPTEMBER 2015 is yet to be paid.
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Rent for the amount of $4,000 was paid in advance for the month of October 2015, using a Prepaid Rent account.
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Employees are owed wages of $300:00 on balance day.
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A physical stock take as at 30th September 2015 revealed:
17 A1 Benchtop Stoves and
13 Delux Benchtop Stoves.
STUDENTS ARE ALLOWED TO USE MS EXCEL SPREADSHEETS OR MS WORD OR MYOB OR ANY OTHER SUITABLE COMPUTERISED PROGRAM TO PREPARE THE FOLLOWING:
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General and Special Journals to record:
Opening balances, all transactions for the month of SEPTEMBER 2015, all balance day adjustments, closing entries and reversing entries as required.
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Post all Journals to General Ledgers and Subsidiary Ledgers for Accounts Payable and Accounts Receivable.
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Post transactions to the Inventory Cards for A1 Benchtop Stoves and the Delux Benchtop Stoves.
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Bank Reconciliation Statement as at 30 SEPTEMBER 2015.
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Unadjusted Trial Balance, Adjusted Trial Balance, and Post Closing Trial Balance as at 30 SEPTEMBER 2015.
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An Income for the three months ended 30 SEPTEMBER 2015 and Balance Sheet as at 30 SEPTEMBER 2015.
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BENCHTOP STOVES R.US..
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MARKING SCHEME |
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STUDENTS ARE NOT PENALISED FOR SUBSEQUENT ERRORS. |
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THAT IS WHY THE MARKS FOR THE JOURNALS ARE SO HIGH. |
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JOURNALS |
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CASH RECEIPTS JOURNAL |
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8 |
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CASH PAYMENTS JOURNALS |
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25 |
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GENERAL JOURNALS |
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46 |
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SALES JOURNALS |
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3 |
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PURCHASES JOURNALS |
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3 |
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PURCHASES RETURNS JOURNALS |
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3 |
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PETTY CASH BOOK |
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6 |
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INVENTORY CARDS. SUBSIDIARY ACC. RECEIVABLE LED. AND REPORT |
20 8 |
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SUBSIDIARY ACC. PAYABLE LED. AND REPORT |
7 |
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GENERAL LEDGER |
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29 |
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BANK RECONCILITATION |
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7 |
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UNADJUSTED TRIAL BALANCE |
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24 |
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ADJUSTED TRIAL BALANCE |
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8 |
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POST CLOSING TRIAL BALANCE |
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3 |
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INCOME STATEMENT |
10 |
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BALANCE SHEET |
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10 |
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TOTAL |
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220 |
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FINAL GRADE 20% |
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