This question has two parts – Part A and Part B.
AM Airways Pty Ltd (AMAPL) operates regional air services to corporates and the general public in South Australia. Its financial year ends on the 30th June. You are provided with transactions which occurred during March 20X1. Each transaction is provided separately below together with a blank general journal template.
Prepare general journal entries for AM Airways Pty Ltd (AMAPL) for a selection of transactions for March 20X1 which are listed below. If you believe a general journal entry is not required then just make that comment in the journal template. In keeping with AMAOL’s high standards each journal entry you write must be fully complete and correct otherwise no marks will be awarded for that entry. Narrations are required. (Ignore GST.)
|March 1: A corporate customer paid $11,560 for flights taken in January.|
|March 7: AMAPL outsources all its IT requirements. This day it paid $125,000 in advance for the next 6 months IT services. AMAPL recognises all such transactions to an asset account.|
|March 11: AMAPL has a Loan with the Easi Bank. Interest of $23,455 was paid in arrears.|
|March 15: AMAPL owned shares in another company as an investment. It decided to sell those shares and received $255,670 for them.|
|March 16: Bought office and stationery supplies on credit worth $34,431 which will be used over a 2 year period.|
|March 28: AMAPL also provide flying lessons to the public. A complete program consists of 15 monthly lessons and each lesson costs $330. 8 people signed up for the entire program and they all paid today. The first lesson is on 15th May 20X1.|
You are in the process of finalising AMAPL’s end of year financial statements as at the 30th June 20X1. The information that follows provides a series of issues which may give rise to an adjusting or other entry/s. Each issue is provided separately together with a blank general journal template.
Prepare any relevant general journal entries for AMAPL based on the information provided as at 30th June 20X1 which is a Thursday. Narrations/descriptions are not necessary. If you believe a general journal entry is not required then just make that comment in the journal template. Round any calculations to the nearest dollar. (GST is ignored).
|Wages are paid every two weeks in arrears. The last pay date was on the 22nd June 20X1 and pays are calculated to the end of the previous day. A five business day working week is used. There are 12 employees who each receive $3,975 on each pay date. When pays are made the entire amount is debited to wages expense.|
|On the 31st December 20X0 AMAPL paid $45,000 to Aviation Australia magazine for 16 months future advertising. The advertising will be used up evenly throughout the period. The payment was recognised to an expense account.|
|Accured interest on the loan which AMAPL has with the Easi Bank has been calculated as $18,770 at balance date.|
|The invoice for electricity to the 30th June has not been received. It is estimated, though, that the amount is $6,530.|
You are provided with the following journal entries for Wood Industries Limited for the months of March and April 20X1. The previous financial year ended on 30th June 20X1.
|March 2||Cash at Bank||673|
|Cash at Bank||43,000|
|Cash at Bank||5,233|
|April 12||Wages expense||8,565|
|April 15||Wages Payable||8,565|
|Cash at Bank||8,565|
|April 26||Fuel expense||1.243|
Record the above relevant journal entries in the T accounts of Accounts Payable and Cash at Bank only which are provided on the next page. You also need to properly balance the two accounts at the end of March 20X1 (NB there is no need to balance at the end of April).
|Cash at Bank|
You are the Financial Accountant for FATE Education Ltd. At the 30th June 20X1 you recorded the following entries into the General Journal. These entries attended to adjustments and other entries required to be made at year end so that account balances are correct. (GST is ignored).
|30th June||Prepaid Marketing||21,420|
|(Recognising unused marketing expense)|
|Revenue Received in Advance||22,950|
|Education Services revenue||22,950|
|(Recognising revenue earned)|
|(Accruing interest to date)|
|(Recording expense for invoice not yet received)|
|(Correction for under recording of dinner expense at restaurant held on 26th June)|
|(Recognising insurance expense for 3 months)|
|(Correcting accounting coding error)|
It is now 1st July 20X1 and you are required to consider each of the above general journal entries and determine if any general journal entries in the subsequent period (ie reversing entries) are now required. Complete the Table below by inserting a cross (X) in the appropriate box as to whether a reversing general journal entry is required as at 1st July 20X1.
|ADJUSTING ENTRY IDENTIFICATION||REVERSE||DO NOT REVERSE|
Amy Hairdressing Pty Ltd operates a series of hair salons around South Australia and is registered for GST. There are two parts to this question.
You are provided with transactions which occurred in October 20X1. Each transaction is separated below together with a blank general journal template.
Prepare general journal entries for Amy Hairdressing Pty Ltd for each transaction below which includes any GST implications. GST is 10%. Narrations are not required. Round calculations to the nearest dollar where applicable.
|Oct 1: Paid $1,890 plus GST for telephone expenses.|
|Oct 3: Paid $9,152 including GST for marketing. This is for 12 months future marketing and the company initially recognises prepayments in an asset account.|
|Oct 9: A significant sale was made with a modelling agency for hair services to all of its models. The sale amount was $13,500 plus GST. 60% was received in cash and the remainder is to be received in 28 days.|
|Oct 16: Received $4,114 (including GST) from a customer for a sale which occurred on September 8th.|
|Oct 19: In September a customer received hair treatment services which cost $350 plus GST. The customer was to pay for this at the end of October. However, the customer is unhappy with the service and Amy Hairdressing Pty Ltd has decided to not seek payment by the customer and reverse the transaction.|
Part B (This is unrelated to the information provided in Part A above)
The GST ledger accounts for the company for the month of July are provided below.
|July 1||Purchases||689||July 8||Plant & Equipment||8,772|
|9||Plant & Equipment||23,346|
It is 31st July and the company is required to clear the GST accounts and remit monies to the Australian Tax Office if there is an amount due to it.
Prepare a general journal entry to pay monies to the Australian Taxation Office at 31st July. If you believe that no money is owing then just state that.
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