Q. 1


Kargil P/L began operations and completed the following transactions during July 2018 as follows:


July 1 Sold ordinary shares for cash for $25,000
2 Set up a petty cash for $200, to be managed by the receptionist.
2 Paid quarterly office rent, $3,300
3 Paid cash for office computers, $4,400. This equipment is expected to remain in service for 5 years.
3 Employed a full-time draftsman at the rate of $800 per fortnight.
3 Purchased milk, coffee, sugar, tissues etc for office amenities for $49.25. This total amount included GST of $13.74.
4 Purchased office furniture on credit for $3,960. The furniture should last for 7 years.
4 Purchased supplies on credit, $990, terms 2/20 net 30
9 Performed Design services for a client on credit, $2,420 terms 1/20, net 30
18 Paid electricity bill for the period July 1-15, $275
18 Paid wages $800 to the draftsman for the fortnight ending July 17
21 Received $1,980 advance from a client for job to be performed in September 2018.
22 Hired a secretary to be paid $2,055 on the 20th of each month. The secretary began work immediately.
23 Performed service for a client & received cash of $4,400
24 Paid for supplies purchased on July 4th
28 Received $1,197.90 on account.



Additional Information:

  • Kargil P/L is registered for GST.
  • Depreciation on office equipment & furniture is calculated using straight line depreciation. The residual value of computers is nil. The residual value of furniture is $100 (excl GST).
  • Petty cash is reimbursed on the last day of each month.
  • Supplies inventory on hand at the end of the month was $370.


  1. Journalise the transactions from 1-28 July as shown in the table above. (Marks: 20)
  2. Prepare a worksheet showing unadjusted trial balance. (Marks: 7)
  3. Use the worksheet to prepare adjusted trial balance. Clearly show the adjustments, if any, directly on the worksheet. (Marks: 18)
  4. Prepare T accounts for Service Revenue, GST Clearing & Cash. (Marks :5)
  5. Prepare income statement for the month of July 2018 based on c) above. (Marks: 5)
  6. Prepare statement of changes in Retained Earnings. (Marks: 3)
  7. Prepare balance sheet as at 31/7/2018. (Marks:7)


Note: Show your calculations clearly where applicable.



Brisbane Ltd. has the following balances at the end of June 2018:

Account Balance $
Cash 15,800
Supplies 2,000
Prepaid Rent 900
Equipment 49,000
Accumulated Depreciation 5,500
Accounts Payable 4,500
Salary Payable 500
Unearned Service Revenue 5,100
Long Term Loan Payable 4,400
Share Capital 30,000
Retained Earnings 6,500
Dividend 1,100
Service Revenue 18,100
Salary Expense 3,000
Rent Expense 1,500
Depreciation Expense 300
Supplies Expense 400
Utilities Expense 600



  1. Prepare classified balance sheet for Brisbane Ltd. as at 30.6.18.
  2. Journalise any required closing entries for the company.

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