Making general journal entries（10%）
Company XYZ has appointed you as an Accountant and you are asked to review the following transactions as at 30 June 2018, which is the current year before any adjusting entries have been made.
(a) 08/09/2017 Purchase equipment for cash $5000
(b) 18/10/2017 Provide services to a client A for $500 on account
(c) 20/10/2018 pay the bank loan for $10000
(d) 11/12/2018 Invest additional $30000 cash into the business by the owner
(e) 01/18/2018 Collect an account receivable in cash from client A
(f) 31/01/2018 Pay wages to employees for $5000
(g) 04/02/2018 Paid the electricity bill for $100
(h) 06/04/2018 Sell a piece of equipment for $3000 in cash
(i) 05/05/2018 Withdraw cash by the owner for private usage for $500
(j) 06/06/2018 Borrow money on a long-term basis from a bank for $100000
- List the effect of each of the following transactions upon any or all of the four financial statements of a business. Apart from indicating the financial statement(s) involved, use appropriate phrases such as ‘increase total assets’, ‘decrease equity’, ‘increase income’, ‘decrease cash flow’ to describe the transaction concerned.
- Record all the necessary journals following the template below.
Prepare a Profit & Loss statement (10%)
Use the following information from the records of Preston Partners to prepare an income statement under the periodic inventory system for the year ended 30 June 2020.
|Inventory, 1 July 2019||13 860|
|Inventory, 30 June 2020||12 920|
|Selling and distribution expenses||45 420|
|Purchases returns and allowances||4 420|
|Sales returns and allowances||6 220|
|Administrative expenses||16 460|
|Freight inwards||3 180|
|Finance expenses||2 020|
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