1 A Count Of The Stationery Room Showed That Office Supplies On Hand At 30 Th June 2743713
(1) A count of the stationery room showed that Office Supplies on hand at 30th June 2018 were $2 313.
(2) Both the Furniture & Fittings and the Equipment will be used evenly over their useful lives. The expected total useful lives and residual values of both assets is as follows:
Estimated Useful life
Estimated Residual
Furniture & Fittings
6 years
$6 500
Equipment
10 years
$1 800
(3) Interest on the loan is 4.5% per year. Interest accrued for the year but not recorded at 30th June 2018 was $2048.
(4) In order to allow for cash flow fluctuations, the bank has approved a $25,000 overdraft facility for Peter’s business bank account.
(5) The balance in the Prepaid Insurance account represents a 12 month insurance policy that commenced on 1st May 2018.
(6) $2 670 of the recorded Sales Revenue is for deposits paid for catering services to be provided in July.
(7) As of 30th June 2017, Peter has estimated that 2% of his Accounts Receivable will not be collected.
REQUIRED:
As it is now the end of the financial year, you have to undertake the following work for Penny:
a. Prepare any necessary Balance Day Adjustment Journals for SCC. Include a brief narration (explanation) for each journal entry. (11 marks)
b. Post the journals from (a) above to the General Ledgers provided. (7 marks)
c. Complete the Adjusted Trial Balance provided for the account balances calculated in the General Ledgers from (b) above. (7 marks)
SALT and CHILLI CATERING
UNADJUSTED TRIAL BALANCE
AS AT 30 June 2018
Debit ($)
Credit ($)
Cash at Bank
15 064
Accounts Receivable
18 949
Inventory
18 760
Prepaid Insurance
6 114
Office Supplies on hand
2 436
Furniture & Fittings
52 370
Accumulated Depreciation – Furniture & Fittings
13 974
Equipment
81 895
Accumulated Depreciation – Equipment
17 880
Accounts Payable
24 391
Electricity Payable
3 110
Loan Payable
53 155
Peter’s SCC – Capital
54 516
Peter’s SCC – Drawings
36 695
Sales Revenue
423 300
Sales Returns and Allowances
9 440
Cost of Sales
163 808
Discount received
12 526
Freight inwards
7 420
Catering Salary Expense
65 936
Delivery Expense
18 992
Advertising Expense
25 773
Rent Expense
26 548
Office Salaries Expense
36 150
Electricity Expense
9 963
Discount Allowed
6 539
Totals
602 852
602 852
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