Fiona Sporty uses a purchases journal, a cash payments journal, a sales journal, a cash receipts journal and a general journal. Indicate in which journals the following transactions are most likely to be recorded.
- Purchased inventories on credit.
- Sales of inventory on credit.
- Received payment of a customer’s account.
- Payment of monthly rent by cheque.
- End of period closing entries
Below is information about Lisa Ltd’s cash position for the month of June 2019.
- The general ledger Cash at Bank account had a balance of $21,200 on 31 May.
- The cash receipts journal showed total cash receipts of $292,704 for June.
- The cash payments journal showed total cash payments of $265,074 for June.
- The June bank statement reported a bank balance of $41,184 on 30 June.
- Outstanding cheques at the end of June were: no. 3456, $1,448; no. 3457, $84; no. 3460, $70 and no. 3462, $410.
- Cash receipts of $10,090 for 30 June were not included in the June bank statement.
- Included on the bank statement were:
- a dishonoured cheque written by a client James Ltd, $136
- a credit for an electronic transfer from a customer of $644
- interest earned, $44
- account and transaction fees, $120.
- Update the cash receipts and cash payments journals by adding the necessary adjustments and calculate the total cash receipts and cash payments for June.
- Post from cash receipts and cash payments journals to the Cash at Bank ledger account and balance the account.
- Prepare a bank reconciliation statement at 30 June.
- What is the amount of cash that should be reported on the 30 June balance sheet?
On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST.
During June, the following transactions occurred:
- Revenue earned on credit, $1,195,000.
- Sales returns, $24,100.
- Accounts receivable collected, $1,400,000.
- Accounts written off as uncollectable, $15,851.
Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June. Ignore GST.
- Prepare general journal entries to record the four transactions and to adjust the Allowance for Doubtful Debts account.
- Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June.
- On 29 June, Kim Ltd, whose $2,400 account had been written off as uncollectable in June, paid its account in full. Prepare journal entries to record the collection.
Tamworth Trading Ltd is a company operating in the retail sector. The beginning inventory of
Product EF5089 and information about purchases and sales made during June are shown below.
|Units||Unit price $|
Tamworth Trading Ltd uses the perpetual inventory system, and all purchases and sales are on credit. Selling price is $5 per unit. A stocktake on 30 June revealed 7700 units in inventory. Ignore GST.
- Using the FIFO method, prepare an appropriate inventory record for Product EF5089 for June.
- Prepare an income statement down to the gross profit for Tamworth Trading Ltd for June.
Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.
- Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019–20 using each of the following depreciation methods
- diminishing balance (depreciation rate has been calculated as 31%)
- units of production (assume the van was driven 78,000 kilometres during the financial year).
- Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balance method.
- Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight-line method.
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