Account Name Debit Credit Cash 46,000 Accounts receivable 87,500...

Question

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...

1 answer below »

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:

Accrued wages at the end of March amounted to $4,800 for ShopA1 and $3,600 for ShopA2.
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.
Computer Equipment is depreciated at 25% per annum, reducing balance method, (50% to ShopA1 and 50% to ShopA2)
Shop Fixtures and Fittings are depreciated at 15% per annum straight line method, (50% to ShopA1 and 50% to ShopA2)
Prepaid insurance as at 28^th February amount to $8,250 represented the premium paid on an annual policy starting on 1^st December, 2010. Insurances are split 50/50 between ShopA1 and ShopA2 and calculated on a daily basis. (365 day year)
Sales commission earned by retail assistants, but not paid as at 31^st March amounted to $5,830 (40% ShopA1, 60% ShopA2)
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.
Accrued electricity as at 31^st March for ShopA1 is $385 and ShopA2 is $407.
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.
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 31^st March.
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”.

005_rgvzk-2chr3e5t.docx

Answered Same Day Dec 21, 2021

Robert · Accepted Answer

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.

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...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment