Assignment Question - Gino Wurihiz buys and sells plants, trading under the name Garden Slug Co. Gino is in the first year of business, so is not registered for GST, and uses a perpetual inventory accounting system. Assume transactions are on credit, unless stated as 'paid', 'received' or 'for cash'. Transactions for March 20X1 were as follows:
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$
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Gino commenced business by depositing cash into the business account
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50,000
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Gino also invested: inventory valued at
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7,000
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Gino also invested: a vehicle valued at
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22,000
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Land and buildings costing $200,000 were purchased with a deposit of
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80,000
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The balance was raised by a mortgage with the TSB Bank
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120,000
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Purchased plants (inventory) on credit from Neva Fare Ltd
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40,000
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Paid for a patent on a plant design
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14,000
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Delivery expenses on the plants purchased by Gino were
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2,300
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Sold plants for cash (cost price was 25,000)
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75,000
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Received rent on lease of part of his property
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5,000
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Sold plants to Will Knotpay (cost price 1,100)
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3,300
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Paid business insurance
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1,900
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Paid personal insurance
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700
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Paid Neva Fare Ltd in cash and received discount; cash paid was
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38,300
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Advertising invoice was received from Dominion Post newspaper
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2,900
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Purchased plants for cash
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19,000
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Sold plants on credit to Svima Shaw (cost price was 19,000)
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57,000
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Delivery expenses of the plants sold to Svima Shaw were
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3,900
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Paid office expenses (including envelopes, pens etc.) of
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4,300
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Bad debt to write off (Will Knotpay fled to South America without paying)
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3,300
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Gino withdrew money for personal use
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4,800
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Svima Shaw paid her account, less discount; cash received was
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55,600
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Gino took a pair of plants home for personal use; cost price was
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350
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Interest was charged on the bank loan
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220
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Bank fees for the month were paid
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50
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Purchased shares in Watties Ltd for cash
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12,000
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Received an invoice from Vodafone for phone use in June
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950
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Received an invoice for power used in June from Burnout Ltd
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770
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Wages paid were
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8,000
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Gino borrowed money from his brother Idunno Wurihiz
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12,000
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Purchased debentures in Persil Ltd for cash
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6,000
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Sold plants on credit to Soled Azarok (cost 4,300)
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12,900
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Stocktake (count of inventory still on hand) at month end was
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16,000
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Office stores count (of envelopes, pens, paper etc. still on hand) was
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1,100
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Additional information:
- The mortgage is repayable in instalments of $10,000 in December each year.
- Wages are 35% sales and 65% administration.
- Idunno's loan is repayable in full in 3 years' time; no interest will apply.
a) Record these transactions on an accounting equation sheet, including column totals at the end of the month.
b) Prepare a fully classified Income Statement for the month.
c) Prepare a Statement of Changes in Equity.
Prepare a fully classified Balance Sheet as at the end of the month.