The University of Melbourne Department of Accounting ACCT 10002 Introductory Financial Accounting

Tutorial Week 3 Topic: Double Entry Recording Business Ltd second month Business Limited Opening Balances - 2nd month Debit Accounts Payable Accounts Receivable Cash at Bank Equipment Furniture GST Payable GST Receivable Income Tax Payable Loan Materials Prepaid Rent Retained Profits Share Capital 1,400 6,010 7,000 20,000 350 2,190 270 24,000 150 600 230 12,000 Credit 500

ACCT 10002 Introductory Financial Accounting Tutorial Illustration 2 Double Entry Event Transaction 13 Bought materials on credit for $1,375 (GST inclusive) 14 Paid advertising $847 (GST inclusive) 15 Provided fees revenue on credit for $2,640 (GST inclusive) 16 Paid wages $650 17 Paid $700 owing to supplier 18 Used $50 materials for promotional purposes 19 Purchased more office equipment for $3,000 (GST exclusive) 20 Received $1,000 on account from customer 21 Paid wages $650 22 Made a loan repayment of $1,240 which included $240 in interest expense 23 Received $1,320 from cash client (GST Inclusive) 24 Paid dividend of $200 Adj. 4 Materials on hand were $950 Adj. 5 Another month's rent was used up Adj. 6 Wages still owing were $20 Adj. 7 The company's tax expense for the month was 30% of net profit

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Required: (i) Post the opening balances in the Asset, Liability & Equity accounts (i) Post the transactions 13 to 24 into the General Ledger (ii) Post the Balance Day Adjustments - Adjustments (iv) to (vii) into the General Ledger (iii) Balance all Asset, Liability and Equity accounts. (iv) Close all Revenue and Expense accounts to the Profit & Loss Accounts (v) Transfer Net Profit after Tax or Net Loss after tax to the equity account Retained Profit (vi) Prepare a Trial Balance including Retained Profits ACCT 10002 Introductory Financial Accounting Bank Date Details Amount Opening Balance 6,010 20 Accounts Receivable 1,000 23 Fees / GST Payable 1,320 Tutorial Illustration 2 Date 14 16 17 19 21 22 Details Advertising / GST Rec'ble Wages Accounts Payable Equipment GST Receivable Wages Loan Interest expense Dividends Balance Amount 847 650 700 3,000 300 650 1,000 240 200 743 $8,330

$8,330 Balance 743

Date

Details Opening Balance

Furniture Amount Date 20,000 $20,000

Details Balance

Amount 20,000 $20,000

Balance

20,000

Date

Details Opening Balance Cash at Bank Balance

Equipment Amount Date 7,000 Balance 3,000 $10,000 10,000

Details

Amount 10,000 $10,000

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Date 13

Details Opening Balance Accounts Payable

Materials Amount Date 150 18 1250 Adj 4 Adj 4 $1,400 950

Details Advertising Materials used Balance

Amount 50 400 950 $1,400

Balance

Date 15

Details Opening Balance Fees / GST Payable

Accounts Receivable Amount Date Details 1,400 20 Cash at Bank 2,640 Balance $4,040

Amount 1,000 3,040 $4,040

Balance

3,040

Date 13 14 19

Details Opening Balance Accounts Payable Cash at Bank Cash at Bank

GST Receivable Amount Date 2,190 125 77 300 $2,692

Details Balance

Amount 2,692

$2,692

Balance

2,692

Date

Details Opening Balance

Prepaid Rent Amount Date 600 $600

Details Rent expense Balance

Amount 300 300 $600

Balance

300

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Date 22

Details Cash at Bank Balance

Loan Amount 1,000 23,000 $24,000

Date

Details Opening Balance

Amount 24,000 $24,000

Balance

23,000

Date Balance

Details

GST Payable Amount Date 710 15 23 $710

Details Opening Balance Accounts Receivable Cash at Bank Balance

Amount 350 240 120 $710 710

Date 17

Details Cash at Bank Balance

Accounts Payable Amount Date 700 1,175 $1,875 13

Details Opening Balance Materials / GST Receivable Balance

Amount 500 1,375 $1,875 1,175 Amount 270 156 $426 426

Date Balance

Details

Income Tax Payable Amount Date 426 Adj 7 $426

Details Opening Balance Income Tax expense Balance

Date Balance

Details

Accrued Wages Amount Date 20 Adj 6 $20

Details Wages

Amount 20 $20

Balance

20

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Date Balance

Details

Share Capital Amount Date 12,000 $12,000

Details Balance

Amount 12,000 $12,000

Balance

12,000

Date 24

Details Cash at Bank

Dividends Amount Date 200 $200 Fees revenue Amount Date 3,600 15 23 $3,600

Details Retained Profits

Amount 200 $200

Date

Details Profit & Loss Account

Details Accounts Receivable Cash at Bank

Amount 2,400 1,200 $3,600

Date 22

Details Cash at Bank

Interest expense Amount Date Details 240 Profit & Loss $240 Income Tax expense Amount Date Details 156 Profit & Loss Account $156 Materials used expense Amount Date Details 400 Profit & Loss Account $400

Amount 240 $240

Date Adj 7

Details Income Tax Payable

Amount 156 $156

Date Adj 4

Details Materials

Amount 400 $400

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Date

Details Prepaid rent

Rent expense Amount Date 300 $300

Details Profit & Loss Account

Amount 300 $300

Date 16 21 Adj 6

Details Cash at Bank Cash at Bank Accrued wages

Wages expense Amount Date 650 650 20 $1,320 Advertising expense Amount Date 770 50 $820

Details Profit & Loss Account

Amount 1,320

$1,320

Date 14 18

Details Cash at Bank Materials

Details Profit & Loss Account

Amount 820

$820

Date

Details Interest expense Income tax expense Materials used Rent expense Wages expense Advertising Retained Profit (NPAT)

Profit & Loss Account Amount Date 240 Fees 156 400 300 1,320 820 364 $3,600 Retained Profits Amount Date 200 394 $594 Balance

Details

Amount 3,600

$3,600

Date

Details Dividends Balance

Details Opening Balance Profit & Loss Account

Amount 230 364 $594 394

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Working papers:
Income Statement (Extract) Revenue Less Expenses Net Profit Tax @ 30% Net Profit after tax Adjustment 4 Materials Opening Balance Materials purchased Total materials available Less advertising material Less Closing balance Materials used Adjustment 5 Prepaid rent Prepaid rent for 3 months Per Month: $900 / 3 Balance day Adjustment DR: Rent Expense CR: Prepaid Rent Adjustment 6 Wages owing $20 Balance Day Adjustment DR: Wages expense CR: Accrued Wages Adjustment 7 Income tax Expense: DR: Income Tax Expense CR: Income Tax Payable

3600 3,080 520 156 364

150 1,250 1,400 50 950 $400

$300 DR 300 CR 300

DR 20

CR

20

DR 156

CR 156

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution

Business Limited Post Trial Balances - 2nd month Debit Accounts Payable Accounts Receivable Accrued Wages Cash at Bank Equipment Furniture GST Payable GST Receivable Income Tax Payable Loan Materials Prepaid Rent Retained Profits Share Capital 3,040 20 743 10,000 20,000 710 2,692 426 23,000 950 300 394 12,000 $37,725 $37,725 Credit 1,175

ACCT 10002 Introductory Financial Accounting Business Ltd 2nd month

Tutorial Week 2 Solution