“Great Explorations” is a shop which sells hiking gear, including backpacks, hiking shoes and tents. It is owned and run by Nellie Bly. The following trial balance has been prepared at year end:
TRIAL BALANCE AS AT 30 JUNE 2020
|Debit ($)||Credit ($)|
|Cash on Hand||12,500|
|Inventory (30 June 2020)||32,500|
|Prepaid Shop Rent||24,000|
|Accum. Depreciation Shop Shelving||40,000|
|N. Bly, Capital (1 July 2019)||141,700|
|N. Bly, Drawings||12,500|
|Sales Returns & Allowances||1,200|
|Cost of Sales||128,000|
|Sales Staff Salaries Expense||42,000|
|Council Rates Expense||1,300|
|Administrative Salaries Expense||28,000|
|Sundry Administration Expense||1,800|
The following additional information is also provided for the year ended 30 June 2020:
- A physical stocktake of inventory as at 30 June 2020 revealed $31,000 on hand.
- Nellie has estimated that 6% of the 30 June 2020 balance of Accounts Receivable will never be collected from the customers.
- Sales staff salaries of $6,200 are still owed and have not been paid as at balance date.
- A tent with a sale price of $793 was delivered to a customer on 28 July 2020. The sale of this tent was recorded in the Sales account on the 28th June.
- The Shop Shelving is expected to have a useful life of five years and will then be sold for an estimated amount of $10 000.
- The Prepaid shop rent has been paid four months in advance and covers the rent until 31 July 2020.
- Nellie bought herself a pair of awesome Doc Marten boots from a local Op Shop for $45. She paid for the purchase using her personal bank account.
- $250 of the recorded sales represents cash received in advance from a customer on 16 June 2020 for a large pack of dehydrated meals for a 3 week hiking trip. The food pack will not be delivered to the customer until 10 July 2020.
- The council rates bill of $1 850 for the quarter ending the 30 June 2020 was received in the mail on 27 June 2020. The bill has not yet been recorded or paid.
- Based on the information provided above, record any necessary adjusting journal entries.
- Complete the Sales Staff Salaries Expense ledger provided below only.
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