|
Account Name
|
Debit
|
Credit
|
|
Cash
|
46,000
|
|
|
Accounts receivable
|
87,500
|
|
|
Provision for doubtful debts
|
|
3,200
|
|
Inventory control
|
251,280
|
|
|
Prepaid insurance
|
8,250
|
|
|
Computer equipment
|
85,000
|
|
|
Accumulated depreciation - Computer equipment
|
|
32,000
|
|
Shop furniture & fittings
|
110,000
|
|
|
Accumulated depreciation - Shop furniture & fittings
|
|
58,000
|
|
Goodwill
|
80,000
|
|
|
Accounts payable
|
|
65,500
|
|
GST paid
|
17,970
|
|
|
GST collected
|
|
31,400
|
|
Sales commission payable
|
|
4,800
|
|
Salaries and wages payable
|
|
7,600
|
|
Interest payable
|
|
1,860
|
|
Taxes payable - PAYG withholding
|
|
13,214
|
|
Dividend payable
|
|
33,000
|
|
Loan - non-current
|
|
280,000
|
|
Paid up capital
|
|
100,000
|
|
Retained earnings
|
|
55,246
|
|
|
686,000
|
686,000
|
Adjusting Entries:
1. Accrued wages at the end of March amounted to $4,800 for ShopA1 and $3,600 for ShopA2.
2. Superannuation on Wages and Salaries incurred during the month of March (including the accruals at month end - see adjusting entry 1 above) will need to be accrued at the rate of 9% of Gross Wages.
3. Computer Equipment is depreciated at 25% per annum, reducing balance method, (50% to ShopA1 and 50% to ShopA2)
4. Shop Fixtures and Fittings are depreciated at 15% per annum straight line method, (50% to ShopA1 and 50% to ShopA2)
5. Prepaid insurance as at 28th February amount to $8,250 represented the premium paid on an annual policy starting on 1st December, 2010. Insurances are split 50/50 between ShopA1 and ShopA2 and calculated on a daily basis. (365 day year)
6. Sales commission earned by retail assistants, but not paid as at 31st March amounted to $5,830 (40% ShopA1, 60% ShopA2)
7. The company's short term and long term loans are charged interest at 8% pa. Interest is calculated on a daily basis and is split 50/50 between the 2 stores.
8. Accrued electricity as at 31st March for ShopA1 is $385 and ShopA2 is $407.
9. At the end of the month, after the depreciation charge was made, the company sold some surplus to requirement Shop Furniture that had a written down value of $15,600 at the time of sale, for $12,300 cash. The shop furniture had originally cost the company $29,600. Gains and Losses on non-current assets are split equally between the two shops.
10. Due to the credit crisis, the company has decided to adjust its provision for doubtful debts to equal 10% of the Accounts Receivable balance owing as at 31st March.
11. The management decided to create a provision for Annual Leave to recognise this liability on a progressive basis. The amount to be charged to this provision is $4,200 split equally between the two shops.
Required:
You are required to do the journal entries for the above 11 where the figures are obtained from the table above (the opening balances) and the information in the description of each adjusting entry to be completed. The general ledger accounts to be used in the Adjusting Journal Entries are to be those used in the table above. Each journal entry must be numbered accordingly to the number allocated in the "Adjusting Entries".