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Task 1

Amazon Traders - Trading Statement for the year ending 30 June 2020

Sales Revenue

 $                   78,900.00

Purchase

 $             32,300.00

Add: Opening Inventory

 $             32,000.00

Less: Closing Inventory

 $             10,800.00

Cost of Goods Sold

 $             53,500.00

Freight Inwards

 $               1,550.00

 $             55,050.00

Custom duty

 $               1,600.00

 $                   56,650.00

Gross Profit (Loss)

 $                   22,250.00

Cash Receipts Journal

Date Feb

Rec. No.

Details

Cash Sales (Inventory)

Commission Received

Sundries

GST

Amount Banked

Collected

01-Feb

CR1

Cash Contributed by Ben Hur

 $ 30,000.00

 $               30,000.00

04-Feb

CR2

Inventory Sold

 $                                1,000.00

 $      100.00

 $                 1,100.00

04-Feb

CR3

Commission Received

 $                                  800.00

 $        80.00

 $                    880.00

06-Feb

BS

Bank Interest Received

 $        50.00

 $                      50.00

10-Feb

CR4

Inventory Sold

 $                                   700.00

 $        70.00

 $                    770.00

Total

 $               32,800.00

Cash Payments Journal

Date Feb

Chq. No.

Details

Cash Purchases Inventory

Wages

Sundries

GST Paid

Total Paid

02-Feb

101

Purchased Computer

 $   2,500.00

 $      250.00

 $                 2,750.00

02-Feb

102

Rent Paid

 $   1,200.00

 $      120.00

 $                 1,320.00

03-Feb

103

Inventory Purchased

 $                                2,000.00

 $      200.00

 $                 2,200.00

05-Feb

104

Cash Withdrawn

 $      110.00

 $                    110.00

07-Feb

EFT

Wages Paid

 $                                  650.00

 $                    650.00

07-Feb

105

Advertisement Paid

 $      500.00

 $        50.00

 $                    550.00

08-Feb

BPAY

Council Rates paid

 $      900.00

 $                    900.00

09-Feb

BS

Bank charges paid

 $        25.00

 $                      25.00

Total

 $                 8,505.00

Cash Receipts

Cash Payments

Date

Details

Amount $

Date

Details

Amount $

02-Jul

Cash Recipt

 $  1,446.52

01-Jul

#324875

 $  1,526.16

07-Jul

Cash Recipt

 $  3,486.72

04-Jul

#324876

 $      905.70

11-Jul

Cash Recipt

 $  1,538.90

08-Jul

#324877

 $  2,404.38

11-Jul

Cash Recipt

 $      436.84

12-Jul

#324878

 $  1,702.86

12-Jul

Cash Recipt

 $  2,360.20

15-Jul

#324879

 $  1,296.98

21-Jul

Cash Recipt

 $  1,039.30

20-Jul

#324880

 $      561.40

30-Jul

Cash Recipt

 $      846.76

28-Jul

#324881

 $  1,958.30

Total

 $   11,155.24

Total

 $   10,355.78

Bank Ledger A/c

Date

Details

Debit

Credit

Balance

01-Jul

Balance B/d

2981.98

2981.98

Dr

31-Jul

Receipts

 $  11,155.24

                                 8,173.26

Cr

31-Jul

Payments

 $  10,355.78

                                 2,182.52

Dr

Bank Reconciliation Statement as of July 31

Cheque No.

$

Debit balance as per Bank Statement

-3182.9

Add: Unpresented Cheques

#324856

934.02

Sub-total

-2248.88

Less: Outstanding Deposits

733.1

-2981.98

Credit Balance per the Bank Ledger Account

The main purpose of carrying out a routine bank reconciliation for any business is to ensure that cash records and bank records tally and there is no incidence of omission or double counting. This would help the business to keep a track on the cash flows and also monitoring the preparation of cash statements so as to ensure that a level of accuracy is maintained for the same (Sunarya, Nurhaeni and Haris 2017). The process helps in ensuring that proper cash deposits are made into the bank and further the payments which were due to be made are undertaken. The business is able to maintain a level of transparency and accountability with the help of Bank Reconciliation Process. In an overall basis, it can be said that bank reconciliation is important for identification of mistakes and errors and for tallying the records in cash book and bank statements (Spiteri 2020). It is for such reasons that such processes are considered to be important for maintaining accuracy in financial reporting process.

As per the case when a bank deposits a sum of money into any account than it credits the amount mainly due to the fact that the money does not belong to the bank and it is just keeping it on behalf of the client. However, from the perspective of the depositor of the money, it is his asset and therefore in general ledger cash balances are debited. The above case mainly demonstrates the application of the golden rules of accounting (Arora 2016). The recording for the bank is done in the books of the bank and therefore the money deposited is a liability and therefore demonstrates a credit balance. In the similar manner, when an individual maintains his own books in general ledger, the amount is debited as the cash belongs to him and is part of this total assets (Aisyah, Maimunah and Martono 2017). Further the transaction is also facilitated by double entry system of accounting.

The example of the transactions which may appear in the bank statements but during the process of reconciliation may not appear on the business records are listed below:

  • Cheques Deposited in banks but not yet processed
  • Bank charges for services provided by the bank.

General Journal – John Keith

Date

Particulars

Debit

Credit

01-Sep

Premises A/c…………….Dr

750000

Cash A/c…………………..Dr

30000

Shop Fittings A/c……………Dr

30000

                       To Mortgage on Premises

300000

                        To Capital A/c

510000

Cash  &Assets brought into the business

09-Sep

Motor Vehicle A/c…………………Dr

50000

                       To Capital A/c

50000

Motor vehicle contributed to the business

11-Sep

Drawings A/c………………………..Dr

110

                       To Stock A/c

100

                       To GST paid

10

Stocks being used for personal use

14-Sep

Drawings A/c………………………..Dr

88

                   To Surplus Selving

80

                    To GST paid

8

Surplus Selving used for personal use

Trial Balance

Income Statement

Balance Sheet

Accounts

Debit

Credit

Debit

Credit

Debit

Credit

Building

31,483

31,483

Bank

1,900

1,900

Accounts Receivable

3,700

3,700

Accounts Payable

5,000

5,000

GST Collected

2,600

2,600

GST Paid

2,000

2,000

Sales

44,593

44,593

Cost of Goods Sold

21,118

21,118

Office Equipment

950

950

Inventory

13,832

13832

Delivery Expenses

475

475

Insurance

228

228

Electricity

532

532

Telephone

190

190

Salaries

2,470

2470

Rates

238

238

Discount Allowed

1,007

1007

Rent

484

484

Commission Income

807

807

Capital (opening)

27,607

27,607

Net Profit

18,658

18,658

Totals

80,607

80,607

45400

45400

53865

53865

Amazon Traders - Income Statement for the year ended 30 June

$

$

Sales

44,593

Less: Cost of Goods sold

21,118

Gross Profit

23,475

Add Other Revenue:

Commission Income

807

Total Operating Income

24,282

Total Operating Expenses:

Delivery Expenses

475

Insurance

228

Electricity

532

Telephone

190

Salaries

2470

Rates

238

Discount Allowed

1007

Rent

484

5624

Net Profit (Loss)

18,658

Amazon Traders – Balance Sheet as of 30 June

$

$

Current Assets

Bank

1,900

Accounts Receivable

3,700

Inventory

13832

GST Paid

2,000

21,432

Non-Current Assets

Building

31,483

Office Equipment

950

32,433

Total Assets

53,865

Current Liabilities

Accounts Payable

5,000

GST Collected

2,600

7,600

Total Liabilities

7,600

Net Assets

46,265

Owners’ Equity

Capital (opening)

27,607

Net Profit

18,658

46,265

Reference

Aisyah, E.S., Maimunah, M. and Martono, A., 2017. Effectiveness of Book Closing Using Web Based Accounting Online System 2.0 to Know the Company's Financial Ratios.APTISI Transactions on Management (ATM), 1(1), pp.56-60.

Arora, M.N., 2016. ACCOUNTING FOR MANAGEMENT. HIMALAYA Publishing House.

Spiteri, S., 2020. Financial Accounting: From Its Basics to Financial Reporting and Analysis. Cambridge Scholars Publishing.

Sunarya, P.A., Nurhaeni, T. and Haris, H., 2017. Bank Reconciliation Process Efficiency Using Online Web Based Accounting System 2.0 in Companies. APTISI Transactions on Management (ATM), 1(2), pp.124-129.

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My Assignment Help. (2022). Amazon Traders - Trading Essay For The Year Ending 30 June 2020.. Retrieved from https://myassignmenthelp.com/free-samples/fnsacc311-process-financial-transactions-and-extract-interim-reports/bank-reconciliation-process-file-A1DF6D3.html.

My Assignment Help (2022) Amazon Traders - Trading Essay For The Year Ending 30 June 2020. [Online]. Available from: https://myassignmenthelp.com/free-samples/fnsacc311-process-financial-transactions-and-extract-interim-reports/bank-reconciliation-process-file-A1DF6D3.html
[Accessed 21 November 2024].

My Assignment Help. 'Amazon Traders - Trading Essay For The Year Ending 30 June 2020.' (My Assignment Help, 2022) <https://myassignmenthelp.com/free-samples/fnsacc311-process-financial-transactions-and-extract-interim-reports/bank-reconciliation-process-file-A1DF6D3.html> accessed 21 November 2024.

My Assignment Help. Amazon Traders - Trading Essay For The Year Ending 30 June 2020. [Internet]. My Assignment Help. 2022 [cited 21 November 2024]. Available from: https://myassignmenthelp.com/free-samples/fnsacc311-process-financial-transactions-and-extract-interim-reports/bank-reconciliation-process-file-A1DF6D3.html.

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