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Question 4: Business Transactions and Adjustments

4.1 The stocktake on 30 June revealed $668 worth of supplies on hand.
4.2 The next wages payment will occur on Thursday 5 July for the employee earnings in the final week of June. N Rider worked for 20 hours between 26th and 30th June; B Gee worked a usual week.
4.3 Calculate the amounts for depreciation expense for each of the three types of non-current Assets: office equipment; computer systems; vehicles (Estimate expense as though assets held for whole of month of June.)
4.4 Calculate and record the adjusting entry for rent for the end of the month given that June rent has been used up.
4.5 During the last week of June, Nelly’s Saddlery earned one third of the advance payment for the Paynter’s Pony Club saddlery work.
4.6 Calculate the Allowance for Doubtful Debts based on 5% of accounts receivable at the end of the year and make the necessary adjusting entry.


5 Accounting Requirements and Instructions
5.1 Spreadsheet software
The file on the course Blackboard site (ACC106 Task 2 Student Templates) contains a series of worksheets that you should use to complete the requirements below. Make changes as required including formulas and links.
5.2 Completing the Accounting Cycle
5.2.1 Record all the business transactions from section 3 above in the relevant special journals and post the Account totals to the relevant ledgers using EXCEL linking function.Use the accounts listed in the Chart of Accounts and enter names of the ledger accounts as required. In the ledgers, use formulas to create running totals.


5.2.2 Prepare an ‘Unadjusted’ Trial Balance as at 30 June 2018 by linking balances in the ledger accounts to the Trial Balance. It will be a ‘Live’ Trial Balance but at this point it is unadjusted as the Adjustments have not yet been posted. When completed, check the debit and credit columns are equal in the Trial Balance. Then copy and special paste (as
values only) the Trial Balance into the Worksheet columns ‘Unadj Trial Balance’. These should not change now as they are raw figures. (Tip: Use Paste Special to paste in as values.)


5.2.3 Record the end of year Adjustments, listed above at section 4, in the Worksheet and complete the Worksheet by calculating balances in the Adjusted Trial Balance columns. Then complete the Income Statement and Balance Sheet columns in the Worksheet.
5.2.4 Record the Adjustments in the General Journal and post these adjustments to the General Ledger using new accounts as necessary. (This will change the figures in your Trial Balance which should now match the Adjusted Trial Balance figures in the Worksheet.)


5.2.5 Prepare the closing entries in the General Journal, and post these to the General Ledger. (As with adjustments, this will change your Trial Balance figures if you have linked correctly. NOW, your Adjusted Trial Balance figures in the Worksheet will NOT match the Trial Balance figures for the Revenue and Expense accounts and totals.) Remember: for closing, close revenue and expense accounts to the Income Summary Account, then close Income Summary Account to the Capital account and finally, close drawings to the Capital account.


5.2.6 Finally, prepare the Financial Statements for 30 June 2018 by copying or linking the appropriate figures into your Financial Statements. Refer to your textbook or course Learning Materials for guidance on the format of these Statements. For Balance Sheet,use the Classified Balance Sheet in report form as demonstrated on p.184 of the text;
and Income Statement and Statement of Changes in Equity as demonstrated on p.240 of the text. (Note, for the Income Statement, there will be three revenue streams including discount received.) 

Chart of Accounts                                 
Account Name Account Type Usual Balance Account Type                                
Cash at Bank Asset Debit Current Asset                                
Accounts Receivable Asset Debit Current Asset                                
Allowance for Doubtful Debts Contra - Asset Credit Contra - Current Asset                                
Supplies Asset Debit Current Asset                                
Inventory Asset Debit Current Asset                                
Prepaid rent Asset Debit Current Asset                                
GST Paid Asset Debit Current Asset                                
Office Equipment Asset Debit Non Current Asset                                
Accum Dep - Office Contra - Asset Credit Contra - Non Current Asset                                
Computer Systems Asset Debit Non Current Asset                                
Accum Dep - Computer Contra - Asset Credit Contra - Non Current Asset                                
Vehicles Asset Debit Non Current Asset                                
Accum Dep - Vehicles Contra - Asset Credit Contra - Non Current Asset                                
Accounts Payable Liability Credit Current Liability                                
GST Collected Liability Credit Current Liability                                
Unearned Service Revenue Liability Credit Current Liability                                
PAYG Tax Payable  Liability Credit Current Liability                                
Superannuation Payable Liability Credit Current Liability                                
Private health Payable Liability Credit Current Liability                                
Wages Payable Liability Credit Current Liability                                
N Gee, Capital Equity Credit Equity                                
N Gee, Drawings Equity Debit Equity                                
Sales Revenue  Revenue Credit Revenue                                
Discount Received Revenue Credit Revenue                                
Service Revenue Revenue Credit Revenue                                
Cost of Sales Expenses Debit Expenses                                
Advertising Expense Expenses Debit Expenses                                
Electriciy Expense Expenses Debit Expenses                                
Doubtful Debts expense Expenses Debit Expenses                                
Discount Allowed Expense Expenses Debit Expenses                                
Wages Expense Expenses Debit Expenses                                
Supplies Expense Expenses Debit Expenses                                
Rent Expense Expenses Debit Expenses                                
Depreciation Expense Expenses Debit Expenses                                
Income Summary Temporary only N/A Temporary only                                
                                       
CASH PAYMENTS JOURNAL—JUNE                                 all other acc's not listed  
Date Details Credits Debits
Cash at Bank Discount Received Wages Accounts Payable     (inc GST) Inventory Prepaid Rent Supplies Wages Expense Drawings Advertising Exp Electricity Other Accounts GST Paid
GST Paid Net PAYG Tax Payable Private Health Payable Employer Super Payable Account Name Amt ex GST
02-Jun Paid rent in advance 2860.00               2600.00               260.00
05-Jun Saddlery maintenance supplies purchased 2200.00                 2000.00             200.00
10-Jun 20 x Top Tack Rugs & 6 x
Suede Seat Saddles purchased
6160.00             5600.00                 560.00
11-Jun Advertising expense paid 1650.00                       1500.00       150.00
14-Jun Wages paid 1397.00     255.00 22.00 159.03         1833.03            
19-Jun Drawings made 1300.00                     1300.00          
21-Jun Wages paid 1524.00     318.00 22.00 177.08         2041.08            
26-Jun Electricity paid 290.00                         263.64     26.36
27-Jun TechTime 1858.36 5.23 52.25       1915.83                    
28-Jun Wages paid 1475.00     291.00 22.00 169.86         1957.86            
                                     
                                     
Total columns here      20714.36 5.23 52.25 864.00 66.00 505.97 1915.83 5600.00 2600.00 2000.00 5831.97 1300.00 1500.00 263.64 0.00 0.00 1196.36
                22207.80                     22207.80
                                     
                                       
                DR 22,207.80                    
                CR 22,207.80                    
                difference 0                    
                                       
SALES JOURNAL—JUNE                                  
      Credit Debit Credit Debit                        
Date Details  Sales Revenue GST Collected Accounts Receivable Inventory Cost of Sales                        
                       
05-Jun Clancey's Pony Club 3200 320.00 3,520.00 1,000.00 1,000.00                        
08-Jun Mr Banjo 2,440.00 244.00 2,684.00 795.00 795.00                        
09-Jun Clancey's Pony Club 4,880.00 488.00 5,368.00 1,590.00 1,590.00                        
20-Jun Mr Banjo 2,900.00 290.00 3,190.00 1,657.14 1,657.14                        
21-Jun Miss Sunshine 2,530.00 253.00 2,783.00 835.00 835.00                        
                                     
                                     
                                     
      Total columns here  15,950.00 1,595.00 17,545.00 5,877.14 5,877.14                        
                                       
        DR 23,422.14                            
        CR 23,422.14                            
        difference 0                            
                                       
PURCHASES JOURNAL —JUNE                                  
      Debit Debit Credit                      
Date Details Inventory  Vehicles Computer Systems Office Furniture GST Paid Accounts Payable                      
                     
01-Jun Tmart Purchase       21,200.00 2,120.00 23,320.00                      
02-Jun SaddleSeat Traders Purchase 6,240.00       624.00 6,864.00                      
02-Jun TechTime Purchase     20,900.00   2,090.00 22,990.00                      
03-Jun Mitsubishi Purchase   23,620.00     2,362.00 25,982.00                      
07-Jun SaddleSeat Traders Purchase 2,340.00       234.00 2,574.00                      
23-Jun                                    
                                     
                                     
                                     
  Total columns here 8,580.00 23,620.00 20,900.00 21,200.00 7,430.00 81,730.00                      
              ######## ########                      
                                       
                                       
              DR 81,730.00                      
              CR 81,730.00                      
              difference 0                      
                                       
GENERAL JOURNAL                              
Date Details Debit Credit                              
ADJUSTING ENTRIES                              
June 30 Supplies Expense                                              1,332.00                                
    Supplies      1332                              
    Supplies used up during the year                                   
                                       
June 30 Doubtful Debts expense                                                  232.85                                
    Allowance for Doubtful Debts                  232.85                              
    Bad debts provision made for the year                                  
                                       
June 30 Rent Expense  $                                              650.00                                
    Prepaid rent   650.00                              
    Rent expired for the month of Jun                                  
                                       
June 30 Depreciation Expense                                              1,241.47                                
    Accum Dep - Office                  353.33                              
    Accum Dep - Computer                  435.42                              
    Accum Dep - Vehicles   452.72                              
    Depreciation charged for the month of June                                  
                                       
June 30 Unearned Service Revenue                                              2,633.33                                
    Service Revenue               2,633.33                              
    Service revenue earned recorded                                  
                                       
June 30 Wages Expense 1916.25                                
    PAYG Tax Payable    278.00                              
    Superannuation Payable   166.25                              
    Private health Payable   22.00   DR 8,005.90                        
    Wages Payable   1450.00   CR 8,005.90                        
    Wages accrued for the month of June       difference 0                        
                                       
      8005.90 8005.90                              
                                       
CLOSING ENTRIES                              
                                       
June 30 Sales Revenue 22790.00                                
    Discount Received                                  52.25                                
    Service Revenue                             8,343.33                                
    Income Summary            31,185.58                              
    (Income accounts closed to Income Summary)                                  
                                       
June 30 Income Summary                                            21,136.92                                
    Cost of Sales               8,007.14                              
    Advertising Expense               1,500.00                              
    Electriciy Expense                  263.64                              
    Doubtful Debts expense                  232.85                              
    Discount Allowed Expense                  161.60                              
    Wages Expense               7,748.22                              
    Supplies Expense               1,332.00                              
    Rent Expense                  650.00                              
    Depreciation Expense               1,241.47                              
    (Expenses accounts closed to Income Summary)                                  
                                       
June 30 Income Summary                                            10,048.67                                
    Capital             10,048.67                              
    (Profit transferred to capital account)                                  
                                       
June 30 Capital                                               1,300.00                                
    Drawings               1,300.00                              
    (Drawings closed to capital account)       DR 63,671.17                        
            CR 63,671.17                        
            difference 0                        
                                       
                                                 63,671.17          63,671.17                              
                                       
                                       
Schedule of Accounts Receivable Schedule of Accounts Payable                      
as at 30 June 2018   as at 30 June 2018                      
                                       
Account Name Amount 5%     Account Name Amount                      
Clancey's Pony Club 0.00 0.00     Tmart 23,320.00                      
Mr Banjo 1,874.00 93.70     SaddleSeat Traders 9,438.00                      
Miss Sunshine 2,783.00 139.15     TechTime 21,074.17                      
          Mitsubishi 25,982.00                      
                                   
Total 4,657.00 232.85     Total 79,814.17                      
                                       
                                       
Amount showing in Accounts Receivable General Ledger Trial Balance                                                  4,657.00     Amount showing in Accounts Payable General Ledger Trial Balance                                              79,814.17                    
Difference between Schedule total and General Ledger balance     0     Difference between Schedule total and General Ledger balance     0                    
                                       
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER   ACCOUNTS PAYABLE SUBSIDIARY LEDGER                  
Clancey's Pony Club           Tmart                          
Date Details Debit Credit Balance   Date Details Debit Credit Balance                  
05-06-2018 1x Suede Seat 3,520.00   3,520.00   01-06-2018 Office Furniture   23,320.00 23,320.00                  
09-06-2018 2 x All Purpose Saddle 5,368.00   8,888.00           23,320.00                  
12-06-2018 Cash received   8,888.00 0.00           23,320.00                  
        0.00           23,320.00                  
        0.00           23,320.00                  
                                       
                                       
Mr Banjo           SaddleSeat Traders                          
Date Details Debit Credit Balance   Date Details Debit Credit Balance                  
08-06-2018 1 x All Purpose Saddle 2,684.00   2,684.00   02-06-2018 4 x All Purpose Saddles and 3 x Suede Seat Saddles   6,864.00 6,864.00                  
20-06-2018 2 x Suede Seat Saddles 3,190.00   5,874.00   07-06-2018 3 x All Purpose Saddles   2,574.00 9,438.00                  
25-06-2018 Cash received   4,000.00 1,874.00           9,438.00                  
        1,874.00           9,438.00                  
        1,874.00           9,438.00                  
                                       
                                       
Miss Sunshine           TechTime                          
Date Details Debit Credit Balance   Date Details Debit Credit Balance                  
21-06-2018 1 x All Purpose Saddle & 1 x Top Tack Rug 2,783.00   2,783.00   02-06-2018 Computer System   22,990.00 22,990.00                  
        2,783.00   27-06-2018 Cash paid 1,915.83   21,074.17                  
        2,783.00           21,074.17                  
        2,783.00           21,074.17                  
        2,783.00           21,074.17                  
                                       
                                       
            Mitsubishi                          
            Date Details Debit Credit Balance                  
            03-06-2018 Vehicle   25,982.00 25,982.00                  
                    25,982.00                  
                    25,982.00                  
                    25,982.00                  
                    25,982.00                  
                                       
                                       
                                       
Inventory Reconciliation                                    
30-Jun-18                                    
Item Number On Hand $                                    
All Purpose Saddle 1,590.00                                    
Suede Seat Saddles 4,142.86                                    
Top Tack Rugs 440.00                                    
Total 6,172.86                                    
Link to General Ledger Inventory 6,172.86                                    
Difference 0                                    
                                       
                                       
All Purpose Saddle Purchases Cost of Sales Inventory on Hand                    
Date Unit No. Unit Cost Total cost Unit No. Unit Cost Total Unit No. Unit Cost Total cost                    
  Cost                    
02-Jun 4 810 3,240.00       4 810.00 3,240.00                    
07-Jun     0.00 1 810.00 810.00 3 810.00 2,430.00                    
07-Jun 3 780 2,340.00     0.00 6 795.00 4,770.00                    
08-Jun     0.00 1 795.00 795.00 5 795.00 3,975.00                    
09-Jun     0.00 2 795.00 1,590.00 3 795.00 2,385.00                    
21-Jun     0.00 1 795.00 795.00 2 795.00 1,590.00                    
      0.00     0.00   #DIV/0! 1,590.00                    
      0.00     0.00   #DIV/0! 1,590.00                    
                                       
Suede Seat Saddles Purchases Cost of Sales Inventory on Hand                    
Date Unit No. Unit Cost Total cost Unit No. Unit Cost Total Unit No. Unit Cost Total cost                    
  Cost                    
02-Jun 3 1000 3000       3 1,000.00 3,000.00                    
05-Jun     0 1 1,000.00 1,000.00 2 1,000.00 2,000.00                    
07-Jun     0 1 1,000.00 1,000.00 1 1,000.00 1,000.00                    
10-Jun 6 800 4800     0.00 7 828.57 5,800.00                    
20-Jun     0 2 828.57 1,657.14 5 828.57 4,142.86                    
                                       
                                       
                                       
Top Tack Rugs Purchases Cost of Sales Inventory on Hand                    
Date Unit No. Unit Cost Total cost Unit No. Unit Cost Total Unit No. Unit Cost Total cost                    
  Cost                    
10-Jun 20 40 800.00       20 40.00 800.00                    
13-Jun       8 40.00 320.00 12 40.00 480.00                    
21-Jun       1 40.00 40.00 11 40.00 440.00                    
                #DIV/0! 440.00                    
                                       
                                       
                                       
                                       
                                       
REVENUE   EXPENSES                  
Sales Revenue   Cost of Sales                  
Date Details  Debit Credit Balance   Date Details  Debit Credit Balance                  
30-Jun Cash Receipt Journal (CRJ)                                     6,840.00         6,840.00   30-Jun Cash Receipt Journal (CRJ) ########   2130.00                  
30-Jun Sales Journal (SJ)                                   15,950.00        22,790.00   30-Jun Sales Journal (SJ) ########   8007.14                  
30-Jun General Journal (GJ) #######                     -     30-Jun General Journal (GJ)    $                             8,007.14 0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                                       
                                       
Discount Received   Advertising Expense                  
Date Details  Debit Credit Balance   Date Details  Debit Credit Balance                  
30-Jun Cash Payment Journal (CPJ)                                         52.25              52.25   30-Jun Cash Payment Journal (CPJ) ########   1500.00                  
30-Jun General Journal (GJ)  $  52.25   0   30-Jun General Journal (GJ)                                   1,500.00 0.00                  
        0           0.00                  
        0           0.00                  
        0           0.00                  
        0           0.00                  
        0           0.00                  
                          -             0.00                  
                                       
                                       
Service Revenue   Electricity Expense                  
Date Details  Debit Credit Balance   Date Details  Debit Credit Balance                  
30-Jun Cash Receipt Journal (CRJ)                                     5,710.00         5,710.00   30-Jun Cash Payment Journal (CPJ)  $ 263.64   263.64                  
30-Jun General Journal (GJ)                                     2,633.33         8,343.33   30-Jun General Journal (GJ)                                      263.64 0.00                  
30-Jun General Journal (GJ)     8,343                     -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                                       
                                       
Income Summary   Doubtful Debts expense                  
Date Details  Debit Credit Balance   Date Details  Debit Credit Balance                  
30-Jun General Journal (GJ)                                   31,185.58        31,185.58   30-Jun General Journal (GJ)  $ 232.85   232.85                  
30-Jun General Journal (GJ)            10,048.67   30-Jun General Journal (GJ)                                      232.85 0.00                  
30-Jun General Journal (GJ)    10,049                     -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                          -             0.00                  
                                       
                                       
            Discount Allowed Expense                  
            Date Details  Debit Credit Balance                  
            43281 Cash Receipt Journal (CRJ)  $ 161.60   161.60                  
            30-Jun General Journal (GJ)                                      161.60 0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                                       
                                       
            Wages Expense                  
            Date Details  Debit Credit Balance                  
            30-Jun Cash Payment Journal (CPJ) ########   5831.97                  
            30-Jun General Journal (GJ) ########   7748.22                  
            30-Jun General Journal (GJ)    $                             7,748.22 0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                                       
                                       
            Supplies Expense                  
            Date Details  Debit Credit Balance                  
            30-Jun General Journal (GJ) ########   1332.00                  
            30-Jun General Journal (GJ)                                   1,332.00 0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                                       
                                       
            Rent Expense                  
            Date Details  Debit Credit Balance                  
            30-Jun General Journal (GJ)  $ 650.00   650.00                  
            30-Jun General Journal (GJ)                                      650.00 0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                                       
                                       
            Depreciation Expense                  
            Date Details  Debit Credit Balance                  
            30-Jun General Journal (GJ) ########   1241.47                  
            30-Jun General Journal (GJ)                                   1,241.47 0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                    0.00                  
                                       
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My Assignment Help. (2021). ACC106 Task 2 Essay: Accounting Cycle Completion For June 2018.. Retrieved from https://myassignmenthelp.com/free-samples/acc106-introduction-to-financial-accounting/revenue-and-expense.html.

"ACC106 Task 2 Essay: Accounting Cycle Completion For June 2018.." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/acc106-introduction-to-financial-accounting/revenue-and-expense.html.

My Assignment Help (2021) ACC106 Task 2 Essay: Accounting Cycle Completion For June 2018. [Online]. Available from: https://myassignmenthelp.com/free-samples/acc106-introduction-to-financial-accounting/revenue-and-expense.html
[Accessed 20 June 2024].

My Assignment Help. 'ACC106 Task 2 Essay: Accounting Cycle Completion For June 2018.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/acc106-introduction-to-financial-accounting/revenue-and-expense.html> accessed 20 June 2024.

My Assignment Help. ACC106 Task 2 Essay: Accounting Cycle Completion For June 2018. [Internet]. My Assignment Help. 2021 [cited 20 June 2024]. Available from: https://myassignmenthelp.com/free-samples/acc106-introduction-to-financial-accounting/revenue-and-expense.html.

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