|
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Cash Withdrawn |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 |
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|
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 |
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|
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 |
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|
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 |
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|
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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