QUESTION 1: General Journal, General Ledger, Trial Balance (42 marks} Part A (25 marks)
Aaron Cheney is the sole proprietor of “Tasty Morsels”, a business providing high quality catering services for weddings, special events, corporate functions and private dinners.
Required:
Below is a list of transactions that took place during the month of August 2018.
Record each of the following transactions (where required), using the blank General Journal provided on the following pages. Journals must be correctly formatted and include a narration (explanation) for each entry.
August 1 Tasty Morsel paid the August electricity bill of $375 in cash.
August 3 Tasty Morsel purchased 15 white fine china dinner settings at a cost of $225 each. The purchase was paid in cash.
August 5 Tasty Morsel catered a wedding with 250 guests at a price of $110 per head. The bride and groom paid 25% in cash, with the remaining balance due to be paid within 30 days.
August 12 Tasty Morsel purchased a new laptop computer for $1480 on credit, with payment due in full by the end of the month.
August 14 Classic Cleaning Ltd cleaned the kitchen and left an invoice for $240, with payment terms of 30 days.
August 19 Tasty Morsel paid waiting staff wages of $2250.
August 27 Tasty Morsel received the balance owing for the wedding that was catered on August 5.
August 29 Aaron called an emergency plumber to unblock a drain in his home. He paid 5270 using the business bank account.
August 31 Tasty Morsel paid the outstanding amount from the purchase of the laptop computer on August 12.
| Date | Details | Debit ($) | Credit ($) |
Part B (12.5 marks)
Required:
“Pearly Whites” is a dental practice owned and operated by Dr. Phil McCavity. The journal entries listed below for the month of July 2018 have already been completed.
Post the General Journals recorded below to the General Ledgers provided on the following pages. Remember to foot (balance) each ledger to determine the closing balance (refer to hints below).
| Date | Details | Debit ($) | Credit ($) |
| 1 July | Cash at Bank | 43 000 | |
| Office Equipment | 7 000 | ||
| Capital — P. McCavity | 50 000 | ||
| (The owner, P. McCavity, contributed office equipment costing $7 000 and cosh of 543 000) | |||
| 5 July | Dental Equipment | 134 000 | |
| Cash at Bank | 15 200 | ||
| Loan | 118 800 | ||
| (The business purchased dental equipment for $134 000 and paid $15 200 in cash and the balance with a loan) | |||
| 11 July | Drawings | 2 000 | |
| Cash at Bank | 2 000 | ||
| (The owner, P. McCavity, paid his orthodontist an instalment for his daughter’s braces using the business bank account) | |||
| 15 July | Loan | 5 700 | |
| Cash at Bank | 5 700 | ||
| (The business repaid $5 700 off the loon raised on 5 July) | |||
| 25 July | Cash at Bank | 13 000 | |
| Accounts Receivable | 13 000 | ||
| (The business received payment $13 000 for credit sales made in June) | |||
| 31 July | Cash at Bank | 20 200 | |
| Accounts Receivable | 17 300 | ||
| Sales | 37 500 | ||
| (Dental procedures for the month – $20 200 in cash and the remaining balance to be collected from customers) | |||
Hints to assist in completing the ledgers:
- Do not delete the opening balances given.
- The ledgers are formatted using tables therefore it is best to navigate through the ledgers using the ‘tab’ function.
- When using tables, it is often easier to click on the “¶” function so you are able to see the formatting.
It is acceptable to shorten the account names in descriptions i.e. Cash at Bonk = CAB
Cash at Bank (CAB)
| July 1 | Balance | 66 946 | |||
Accounts Receivable (A/R)
| July 1 | Balance | 13 040 | |||
Dental Equipment
| July 1 | Balance | 40 275 | |||
Office Equipment
| July 1 | Balance | 96 000 | |||
Loan
Sales
| July 1 | Balance | 464 952 | |||
Capital – P McCavity
| July 1 | Balance | 193 062 | |||
Drawings – P McCavity
| July 1 | Balance | 60 600 | |||
Part C (4.5 marks)
Required:
Post the updated General Ledger balances calculated in Part B to the Trial Balance below.
Total both the debit and credit columns on completion.
Pearly Whites
Trial Balance
31 July 2018
| Debit ($) | Credit ($) | |
| Cash at Bank | ||
| Accounts Receivable | ||
| Inventory | 195 768 | |
| Dental Equipment | ||
| Accum Depreciation – Dental Equipment | 43 467 | |
| Cash Register and Scanning Equipment | 67 626 | |
| Accum Depreciation – Cash Register and Scanning Equipment | 45 126 | |
| Office Equipment | ||
| Accounts Payable | 26 250 | |
| Repairs and Maintenance Payable | 14 739 | |
| Loan | ||
| Capital – P. McCavity | ||
| Drawings – P. McCavity | ||
| Sales | ||
| Sales Returns & Allowances | 1 576 | |
| Electricity Expense | 29 964 | |
| Telephone Expense | 2 050 | |
| Advertising Expense | 13 451 | |
| Office Supplies Expense | 2 561 | |
| Office Gas Expense | 1 129 | |
| Water Expense | 5 874 | |
| Discount Allowed | 2 863 | |
| Rent Expense | 162 897 | |
| Repairs and Maintenance Expense | 12 658 | |
| Interest Expense | 12 318 | |
| Totals |
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