[maizie]

Sorry if formatting is not quite right but I had to try to type everything in as I kept getting an error when I tried to attach a word file


Extract from General ledger at 31 December 2008

Stock 44700
Accounts receivable 15312
Bank 9451
Provision for doubtful debt 240
Term deposit maturing 30/4/2009 7000
Land & building 135000
Furniture & equipment 32300
Patents & trademarks 9000
Accumulated depreciation – Buildings 4550
Accumulated depreciation – Furniture & Equipment 5000
Bills payable 7150
Creditors 5993
Sales 409322
Rent income 5400
GST Clearing 146
Interest Income 250
Purchases 325060
Freight out 715
Salaries & Wages – Office 37197
Salaries & Wages – Sales 19020
Insurance 2962
Telephone 4008
Internet expense 470
Electricity 6202
Promotion expense 5653
Bad Debts 1353
Discount allowed 938
Drawings 6710
Capital 225000
663051 663051


The following balance day adjustments are required as at 31 December 2008:
A. Stock at hand as per stock take 44145
B. Accrued interest income 240
C. Accrued salaries and wages – office 600
D. Additional Bad debts to be written off – including GST 319
E. Provision for doubtful debts to be adjusted to 2% of debtors
F. Provide for additional depreciation
Buildings 340
Furniture & Equipment 4020
You are required to :
A. Show general journal entries for the balance day adjustments and post to general ledger
B. Show general journal entries to close accounts as at 31 December 2008
C. Prepare income statement for the year ended 31 December 2008
D. Prepare Balance sheet as at 31 December 2008

MY ANSWERS
Question 2.
General Ledger Of Sam's Shoes
31/12/2008 Stock Variance (Loss) 555
Stock 555
Reduce inventory acc. From $44700 to $44145 after physical stock take
Cost of Goods Sold 555
Stock Variance 555
Stock Variance closed to Cost of Goods Sold
Trading 555
Cost of Goods Sold 555
Cost of goods closed to Trading
Trading (Gross Profit) 83707
Profit & Loss 83707
Trading Closed out Gross Profit transferred to Profit & Loss
Revenue Accrued 240
Interest income 240
Adjustment for interest earned not yet received
Interest Income 490
Profit & Loss 490
Interest income closed out to Profit & Loss
Salaries and wages – Office 600
Expense accrued 600
Adjustment for wages not yet paid
Profit & Loss 37797
Salaries & Wages – Office 37797
Wages closed out to Profit & Loss
Bad debts 290
GST Payable 29
Accounts Receivable Ctrl – Acc XXX 319
Further Bad Debt written off
Profit & Loss 1643
Bad debts 1643
Transfer bad debts to Profit & Loss
Doubtful debt 300
Provision for doubtful Debt 300
New provision for doubtful debts to 2% acc receivable
Profit & Loss 300
Doubtful Debts 300
Doubtful Debt closed out to Profit & Loss
Depreciation – Buildings 340
Accumulated Depreciation - Buildings 340
Additional Depreciation of Buildings for the year
Depreciation – Furniture & Equipment 4020
Accumulated Depreciation – Furniture & Equipment 4020
Additional Depreciation
Profit & Loss 4360
Depreciation – Buildings 340
Depreciation – furniture & Equipment 4020
Depreciation accounts closed out to Profit & Loss
Interest Income 490
Rent Income 5400
Profit & Loss 5890
Balances transferred
Profit and Loss 84068
Freight out 715
Salaries & Wages – Office 37797
Salaries & Wages – Sales 19020
Insurance 2962
Telephone 4008
Internet Expenses 470
Electricity 6202
Promotion Expenses 5653
Bad Debts 1643
Discount Allowed 938
Doubtful Debts 300
Depreciation – Buildings 340
Depreciation – Furniture & Equipment 4020
Balances transferred
Profit & Loss 5529
Capital 5529
Net Profit transferred to Capital account
01/01/2009 Interest Income 240
Accrued Revenue 240
Reversal of balance day adjustment
01/01/2009 Expense accrued 600
Salaries & Wages – Office 600
Reversal of balance day adjustment




Stock
31/12/08 Stock (opening) 44700 31/12/08 Stock variance 555
Balance C/D 44145
44700 44700
1/1/09 Balance b/d 44145

Accounts receivable
31/12/08 Balance c/d 15312 31/12/08 Bad Debts 290
GST Payable 29
Balance c/d 14993
15312 15312
Balance b/d 14993

Bank
31/12/08 Balance b/d 9451


Provisions for doubtful debt
31/12/08 Balance b/d 240
Doubtful Debts 300
540

Term Deposit
31/12/08 Balance b/d 7000

Land & Buildings
31/12/08 Balance b/d 135000

Furniture & Equipment
31/12/08 Balance b/d 32300

Patents & Trademarks
31/12/08 Balance b/d 9000

Accumulated Depreciation Buildings
31/12/08 Balance b/d 4550
Depreciation – Buildings 340
4890

Accumulated Depreciation furniture & Equipment
31/12/08 Balance b/d 5000
Depreciation – Buildings 4020
9020

Bills Payable
31/12/08 Balance b/d 7150

Creditors
31/12/08 Balance b/d 5993

Sales
31/12/08 Trading 409322 31/12/08 Balance b/d 409322

Rent Income
31/12/08 Profit & loss 5400 31/12/08 Balance b/d 5400

GST Clearing
31/12/08 Accounts receivable 29 31/12/08 Balance b/d 146
Balance c/d 117
146 146
1/1/09 117

Interest Income
31/12/08 Profit & Loss 490 31/12/08 Balance b/d 250
Income accrued – Interest 240
490 490
1/1/09 Income accrued Reversal 240

Purchases
31/12/08 Balance 325060 31/12/08 Trading 325060

Freight Out
31/12/08 Balance 715 31/12/08 Profit & Loss 715

Salaries & Wages - Office
31/12/08 Balance b/d 37197 31/12/08 Profit & Loss 146
Expense accrued 600
37797 37797
1/1/09 Expense accrued reversal 600

Salaries & Wages – Sales
31/12/08 Balance 19020 31/12/08 Profit & Loss 19020

Insurance
31/12/08 Balance 2962 31/12/08 Profit & Loss 2962

Telephone
31/12/08 Balance 4008 31/12/08 Profit & Loss 4008

Internet Expense
31/12/08 Balance 470 31/12/08 Profit & Loss 470

Electricity
31/12/08 Balance 6202 31/12/08 Profit & Loss 6202

Promotion Expense
31/12/08 Balance 5653 31/12/08 Profit & Loss 5653



Bad Debts
31/12/08 Balance 1353 31/12/08 Profit & Loss 1643
Accounts Receivable 290
1643 1643

Discount Allowed
31/12/08 Balance 938 31/12/08 Profit & Loss 938

Drawings
31/12/08 Balance 6710

Capital
31/12/08 Balance 225000
Profit & Loss (Net Profit) 5529
230529

Trading
31/12/08 Purchases 325060 31/12/08 Sales 409322
Cost of Goods sold 555
Profit & Loss (Gross Profit) 83707
409322 409322

Revenue Accrued
31/12/08 Interest Income 240 1/1/09 Reversal – Interest Income 240

Expense Accrued
1/1/09 Reversal – salaries & Wages - Office 600 31/12/08 Salaries & Wages – Office 600

Doubtful Debts
31/12/08 Provisions for Doubtful Debts 300 31/12/08 Profit & Loss 300

Depreciation Building
31/12/08 Accumulated depreciation – Building 340 31/12/08 Profit & Loss 340

Depreciation Furniture & Equipment
31/12/08 Accum'd dep'n – Furniture & Equip 4020 31/12/08 Profit & Loss 4020

Stock variance
31/12/08 Stock 555 31/12/08 Cost of Goods Sold 555

Cost of Goods Sold
31/12/08 Stock variance 555 31/12/08 Trading 555

Profit & Loss
31/12/08 Salaries & Wages – Sales 19020 31/12/08 Trading 83707
Salaries & Wages – Office 37797 Interest Income 490
Doubtful Debts 300 Rent Income 5400
Depreciation – Buildings 340
Dep'n – furniture & Equipment 4020
Freight Out 715
Insurance 2962
Telephone 4008
Internet Expense 470
Electricity 6202
Promotion Expenses 5653
Bad Debts 1643
Discount Allowed 938
Capital (Net Profit) 5529
89597 89597

Income Statement of Sam's Shoes
Revenue
Sales 409322
Less Cost of Goods sold
Inventory (opening) 44700
Purchases 325060
Cost of Goods available 369760
Less Inventory (closing) 44145 325615
Gross Profit 83707
Add other revenue
Rent Received 5400
Interest Income 490 5890
Total Revenue 89597
Less Expenses
Selling & Distribution
Freight out 715
Salaries & Wages – Sales 19020
Promotion expenses 5653 25388
General & Administration
Salaries & Wages – Office 37797
Insurance 2962
Telephone 4008
Internet Expense 470
Electricity 6202
Depreciation – Building 340
Depreciation – Furniture & Equipment 4020 55799
Financial & Borrowing
Bad debts 1643
Discount Allowed 938
Doubtful Debts 300 2881
Total Expenses 84068
Net Profit 5529



Balance Sheet of Sam's Shoes

Current Assets
Bank 9451
Accounts Receivable 14993
Less Provisions Doubtful Debts 540 14453
Inventory 44145
Revenue Accrued 240 68289
Non – Current Assets
Term deposit 7000
Building 135000
Less accumulated depreciation – building 4890 130110
Furniture & Equipment 32300
Less accumulated depn– Furniture & Equip 9020 23280
Patents & Trademarks 9000 169390
Total Assets 237679

Current Liabilities
Accounts Payable 5993
Bills Payable 7150
Expense Accrued 600
GST Clearing 117 13860
Non – Current Liabilities
Nil
Less total Liabilities 223819
Owners Equity
Capital 225000
Add Net Profit 5529 230529
Less Drawings 6710
223819