Current Assets 100 Cash 40,125 101 Notes Receivable 102 Accounts Receivable 4,725 103 Inventory 100,174 104 Office Supplies on Hand 105 Store

Current Assets

1. 100 Cash 40,125
2. 101 Notes Receivable
3. 102 Accounts Receivable 4,725
4. 103 Inventory 100,174
5. 104 Office Supplies on Hand
6. 105 Store Supplies on Hand
7. 106 Prepaid Rent
8. 107 Prepaid Insurance

Plant Assets

1. 111 Store Equipment
2. 112 Accum. Depreciation – Store Equipment
3. 113 Office Equipment
4. 114 Accum. Depreciation – Office Equipment
5. 115 Delivery Truck
6. 116 Accum. Depreciation – Delivery Truck

Liabilities

1. 200 Notes Payable
2. 201 Accounts Payable
3. 202 Sales Salaries Payable
4. 203 Office Salaries Payable
5. 204 Telephone Payable
6. 205 Electricity Payable

Owner’s Equity

1. 300 O. Watt, Capital
2. 301 O. Watt, Drawings
3. 302 Income Summary

Revenue

1. 400 Sales
2. 401 Sales Returns & Allowances

420 Discounts Received Cost of Goods Sold

1. 500 Purchases
2. 501 Purchase Returns & Allowances

503 Transportation In Selling Expenses

1. 600 Sales Salaries Expense
2. 601 Advertising Expense
3. 602 Store Supplies Expense
4. 603 Delivery Expense
5. 604 Electricity Expense
6. 605 Depreciation Expense – Store Equipment
7. 606 Depreciation Expense – Truck

Administrative & Other Expenses

1. 608 Office Salaries Expense
2. 609 Rent Expense
3. 610 Office Supplies Expense
4. 611 Depreciation Expense – Office Equipment
5. 612 Telephone Expense
6. 613 Legal & Accounting Fees Expense
7. 614 Insurance Expense
8. 615 Discount Allowed

Debit

376 140 500 800

18,000 4,500 23,000

16,000

Credit

6,400 2,500 6,500

36,150 900 300 400 250

154,940

TRANSACTIONS DURING THE MONTH

August

1 Received purchase invoice from Aladdin Ltd for inventory, $8,500, terms

2/14, n/30, freight $150 C.O.D. Issued cheque no 451 to Fast Freight Ltd. for freight charges.

1 Received purchase invoice from The Rubber Barons for office supplies, $45.00, terms n/30.

1 Sales for the day were: Cash Sales

Light Fantasy P. Hogan

$1,200 $3,500 $650

1. 1 Received cheque from A McConnell to settle account.
2. 2 Received purchase invoice from Baker Supplies for inventory, $750, terms n/30. This was a rush order with freight charges of $50 C.O.D. Issued cheque no. 452 to Star Express.

2 Received cheques from W. Harrigan and B. Yang to settle their accounts.

1. 2 Paid Beacon Ltd with cheque no. 453, and Cable Kings with cheque no. 454.
2. 3 Purchased new office furniture from Rubber Barons for $3,000, terms n/30.

4 Sales for the day were: Cash Sales

J Roberts P Tsu

$2,330 $700

$3,000 including a $30 delivery charge.

1. 4 Paid Aladdin Ltd with cheque no. 455 and Phullops Lamps with cheque no. 456
2. 5 Received cheque from J Roberts for July account.

5 Issued cheque no. 457 to Olay Ltd for July 27 purchases. Freight of $150 was included on the invoice and prepaid by the seller. The amount of the purchase was $5,500 and the discount was $110.

1. 5 Sales for the day were:
2. Cash Sales $2,450
3. N Smith $4,500 including a $45 delivery charge.
4. 6 Received a cheque from P Hogan for $2,450.
5. 7 Paid Sales Salaries $1,800 and Office Salaries $700 with cheque no 458.
6. 8 O Watt withdrew $600 cash using cheque no 459.
7. 8 Paid Lights Galore’s July account with cheque 460.
8. 9 Received purchase invoice from Phullops Lamps for $4,500, terms 2/10, n/30.

9 Sales for the day were:

Cash sales $3,200

B Yang $4,000

9 Paid Lamphouse’s July account with cheque no 461. 9 Received cheque from P. Tsu for July account.

11 Sales for the day were Cash sales

W Harrigan Light Fantasy

$5,500

$3,200 including a $35 delivery charge. $5,000

11 Received cheques from Light Fantasy for $3,430 and from P Hogan for $637.

1. 11 $250 worth of goods delivered by Phullops Lamps on 9 August were found to be defective and returned.
2. 12 Received and paid electricity account for $525 with cheque no. 462.
3. 13 Issued cheque no. 463 to Ezy Print for July printing account.
4. 13 Received payments from N Smith and J Roberts, settling their accounts in full.
5. 14 Issued cheque no’s. 464 and 465 respectively to Baker Supplies and Rubber Barons for July accounts.

14 Paid Sales Salaries $1,800 and Office Salaries $700 with cheque no. 466.

14 Sales for the day were Cash sales

A McConnell P Tsu

$8,320

$7,400 including a $55 delivery charge. $3,250

14 Received credit note from Phullops Lamps for defective goods returned on 11 August.

15 Issued cheque no. 467 for $780 to BNQ Insurance to cover insurance on O. Watt’s residence.

15 Received bill from Rankins Garage for petrol and oil for delivery truck, $368. Issued cheque no. 468.

15 Paid Aladdin Ltd for August 1 invoice by cheque no. 469.

15 Received cheque from Light Fantasy for July account.

15 Received purchase invoice from Baker Supplies for stores inventory, $360, terms 2/5, n/30. Freight of $20 was prepaid by the seller.

1. 15 Sales for the day were: Cash sales
2. P Hogan J Roberts
3. 16 Cash sales of $4,250.

$3,200

$2,300 including a $35 delivery charge. $1,240

18 Received purchase invoice from Rubber Barons for office stationery, $350, terms n/30.

18 Paid Phullops Lamps by cheque no. 470 for August 9 invoice.

1. 18 Received cheques from P Tsu for August 4 invoice and B Yang for August 9 invoice.
2. 19 Sales for the day were:
3. Cash Sales $800
4. W Harrigan $650 Light Fantasy $460
5. 19 Received and paid telephone bill of $620 with cheque no. 471.
6. 20 O Watt withdrew 3 lamps that cost $500 for personal use.

20 Received cheque for $3,136 from W Harrigan. 20 Sales for the day were:

Cash sales B Yang

N Smith

$1,200

$3,500 including a $35 delivery charge. $4,680 including a $40 delivery charge.

21 Paid Baker Supplies for August 15 invoice with cheque no. 472.

21 Received purchase invoice from Lamphouse, $8,540, terms 2/10, n/30. Freight of $40 was prepaid by the seller.

21 Paid Sales Salaries $1,800 and Office Salaries $700 with cheque no. 473.

1. 21 Received cheque from Light Fantasy to settle their invoice dated 11 August.
2. 22 Received purchase invoice from Olay Ltd, $4,500, terms 2/10, n/30.

22 Received a cheque from A McConnell for $1,960 and a 60 day note at 8% for the balance of the invoice dated 14 August.

(A McConnell takes a 2% discount on the $2,000 because it was paid within the discount period. Use the cash receipts journal to record the receipt of the cheque and the general journal to change the balance of the account receivable to a note receivable).

1. 22 O Watt withdrew $800, cheque no. 474.
2. 23 Cash Sales for the day were $8,000.

23 Received a cheque from P Tsu to pay invoice dated 14 August.

25 Received purchase invoice from Phullops Lamps, $5,200, terms 2/10, n/30.

25 Sales for the day were:

Cash Sales $2,300

A McConnell $4,000

1. 25 Received a cheque from P Hogan to pay invoice dated 15 August.
2. 26 A McConnell returned $300 worth of goods purchased the previous day. Issued a credit note to A McConnell.
3. 26 Received purchase invoice from Baker Supplies for inventory, $4,000, terms n/30.
4. 27 O Watt visited Solomons & Morrison, solicitors, to discuss incorporation. Their fee was $350. Watt issued cheque no. 475 to settle this account.
5. 27 Sales for the day were
6. Cash sales $1,000
7. P Tsu $3,000 including a $35 delivery charge.
8. 28 Paid Rubber Barons with cheque 476 for August 1 and 3 purchases.

28 Received merchandise C.O.D. from Sparkle Lighting for inventory, $5,000. Issued cheque no. 477 in full payment.

1. 28 Paid Sales Salaries $1,800 and Office Salaries $700 with cheque no. 478
2. 29 Tyler Motors made major improvements to the delivery truck. The bill came to $8,000. Issued cheque no. 479 for $3,000 and a 6 month note at 8% for the balance. (Use the cash payments journal to record the cheque and the general journal to record the note payable).

29 Received a cheque from W Harrigan for August 19 purchase.

29 Sales for the day were: Cash sales

P Hogan J Roberts

$ 800

$2,500

$1,200 including a $25 delivery charge.

30 Received purchase invoice from Cable Kings, $12,500, terms 2/10, n/30.

30 Issued cheque no. 480 to Baker Supplies for August 2 purchases, and cheque no. 481 to Lamphouse for August 21 purchases.

30 Received cheques from N Smith & B Yang to settle their August 20 purchases.

Supplementary month-end information is as follows:

1. The 31 August physical inventory shows merchandise on hand to be $77,835.
2. Salaries for August 29, 30 and 31 incurred but not paid were Office Salaries $270
3. Sales Salaries $600
4. The depreciation expense for August is Office Equipment $200 Store Equipment $400 Delivery Truck $450
5. The following supplies were on hand at 31 August: Office Supplies $420
6. Store Supplies $ 80
7. Analysis of the Prepaid Insurance account reveals that $160 of insurance premiums expired during August.
8. $400 of the balance of the Prepaid Rent account has expired at the end of August.
9. Information extracted from the Accounts Receivable Ledger indicate the following balances outstanding at 31 July:

No. 1 – W Harrigan (24 July) No. 2 – P Hogan (28 July) No. 3 – Light Fantasy (21 July) No. 4 – A McConnell (23 July) No. 5 – J Roberts (27 July) No. 6 – N Smith (14 July)

No. 7 – P Tsu (30 July) No. 8 – B Yang (18 July)

$375.00 $2,500.00 $600.00 $255.00 $175.00 $250.00 $220.00 350.00

8. The Accounts Payable Ledger revealed the following balances (invoices and terms) outstanding at 31 July:

No. 1 Aladdin Ltd 20 July (2/14, n/30)

No. 2 Baker Supplies 14 July (n/30)

No. 3 Beacon Ltd

28 July (2/5, n/30)

No. 4 Cable Kings

24 July (2/10, n/30)

No. 5 Ezy Print 13 July (n/30)

No. 6 Lamphouse

30 July (2/10, n/30)

No. 7 Lights Galore 27 July (2/12, n/30)

No. 8 Olay Ltd.

27 July (2/10, n/30)

No. 9 Phullops Lamps 26 July (2/10, n/30)

No. 10 Rubber Barons 14 July (n/30)

Required:

1. Make necessary reversing entries

$4,500.00 $650.00 $2,000.00 $3,500.00 $650.00 $8,150.00 $8,000.00 $5,650.00 $3,000.00 $50.00

1. EntertheAugusttransactionsintheappropriatejournals,totalthespecific journals to prove they balance, and post the journals to the general ledger.
2. Takeoutatrialbalance,andcompletetheworksheetusingtheabove adjustments.
3. Journaliseandpostnecessaryadjustingentries
4. Journaliseandpostnecessaryclosingentries
5. Prepare a classified income statement. Charge 70% of the insurance expense, rent expense, electricity expense, and telephone expense to selling expenses. Charge 30% of these expenses to other expenses.
6. Prepareastatementofowner’sequity.
7. Prepareaclassifiedbalancesheet.
8. Preparemonth-endschedulesofaccountsreceivableandaccounts payable.
9. Prepare a post-closing trial balance.