GST Questions

CHAPTER 4 – INVENTORIES

ANSWERS TO QUESTIONS

10. (a) False. GST may be paid on taxable supplies at each stage in the commercial
chain, however, it is the final consumer, not the first purchaser, who bears the
cost of the GST.
(b) True. The GST is a value-added tax, which means that tax is levied on the
value added by a business at each stage in the production and distribution
chain. The GST is not a tax on business income.

BRIEF EXERCISE 4.7

Maori Jewellery
Cash collected = NZ$28,750 ($25,000 + 15% x $25,000)
Revenue earned = NZ$25,000

EXERCISE 4.11

Ezios Earthenware Ltd

(a) Dr Cash/Accounts Receivable $6,600

Cr GST Collected (liability) $600
Cr Sales $6,000

Dr Inventory $1,100
Dr GST Paid (asset) 110
Cr Cash/Accounts Payable $1,210

(b) Dr GST Collected $600

Cr GST Paid $110
Cr Cash $490

1
PROBLEM SET A 4.8
Kids + Kites Ltd
NOTE: Preferred Solutions –(a) and (c)
(a)

Cash/Accounts Receivable 70,700

GST Collected ($70,700/11) 6,427
Sales 64,273
(To record sales revenue and GST collected)

Sales Returns and Allowances 1,273

GST Collected ($1,400/11) 127
Accounts Receivable 1,400

Inventory 25,964
GST Paid ($28,560/11) 2,596
Accounts Payable 28,560
(To record inventory purchase and GST paid)

Accounts Payable 3,360

GST Paid ($3,360/11) 305
Inventory 3,055
(To record purchase return and GST recovered)

GST Collected 6,300

GST Paid 2,291
Cash 4,009
(To record payment of GST to tax authority)

(b)

Cash/Accounts Receivable 70,700

GST Clearing 6,427
Sales 64,273
(To record sales revenue and GST collected)

Sales Returns and Allowances 1,273

GST Clearing 127
Accounts Receivable 1,400
(To record sales returns and GST refunded)

Inventory 25,964
GST Clearing 2,596
Accounts Payable 28,560
(To record inventory purchase and GST paid)

Accounts Payable 3,360

GST Clearing 305
Inventory 3,055
(To record purchase return and GST recovered)

GST Clearing 4,009

Cash 4,009
(To record payment of GST to tax authority)

2
(c)
Cash/Accounts Receivable 28,560
GST Collected ($28,560/11) 2,596
Sales 25,964
(To record sales revenue and GST collected)

Inventory 64,273
GST Paid ($70,700/11) 6,427
Accounts Payable 70,700
(To record inventory purchase and GST paid)

Cash 3,831
GST Collected 2,596
GST Paid 6,427
(To record refund of GST from tax authority)

(d)
Cash/Accounts Receivable 28,560
GST Clearing 2,596
Sales 25,964
(To record sales and GST collected)

Inventory 64,273
GST Clearing 6,427
Accounts Payable 70,700
(To record inventory purchase and GST paid)

Cash 3,831
GST Clearing 3,831
(To record GST refund from tax authority)

BRIEF EXERCISE 3.6

Khanna Ltd
Account Financial Statement Post Closing
Trial Balance
(a) Accumulated Depreciation Statement of financial position Yes
(b) Depreciation Expense Statement of profit or loss No
(c) Retained Earnings Statement of financial position (and Yes
statement of changes in equity)
(d) Dividends Statement of changes in equity No
(e) Service Revenue Statement of profit or loss No
(f) Supplies Statement of financial position Yes
(g) Accounts Payable Statement of financial position Yes

3
EXERCISE 3.3

(a) Revenue recognition criteria.

(b) Accounting period concept.
(c) No violation (not a violation of cost as the principle used for inventory is measurement at the
lower of cost and net realisable value).
(d) Going concern principle.
(e) Cost principle.
(f) Accounting entity concept.

EXERCISE 3.9
Wolfmother Ltd
Statement of profit or loss
for the month ended 31 July 2017

Revenues: $ $
Service revenue ($5 500 + $800) 6 300
Expenses:
Wages expense ($2 300 + $300) 2 600
Supplies expense ($1 200 - $400) 800
Electricity expense 600
Insurance expense 300
Depreciation expense 150
Total expenses 4 450
Profit $1 850

PROBLEM SET A 3.4

(a) Discussed in week 4

Frog Ltd
General Journal
Date Account name (narration) Post Ref Debit $ Credit $
2015
June 30 Accounts Receivable 110 900
Revenue 400 900
(To record revenue not yet received)

30 Office Supplies Expense 510 2 400

Office Supplies 120 2 400
(To record supplies consumed)

30 Insurance expense 530 2 250

Prepaid Insurance 130 2 250
(To record insurance expense)

4
 30 Depreciation Expense – Equipment 540 1 800
Accumulated Depreciation – Equipment 141 1 800
(To record depreciation expense)

30 Salaries Expense 500 1 650

Salaries Payable 210 1 650
(To record accrued salaries)

30 Rent Revenue Received in Advance 220 1 200

Rent Revenue 410 1 200
(To record services provided for revenue)

b)
Frog Ltd
Statement of profit or loss
for the year ended 30 June 2015

$ $
Revenues:
Service revenue 51 900
Rent revenue 17 700
Total revenues 69 600
Expenses:
Salaries expense 27 150
Office Supplies expense 2 400
Rent expense 22 000
Insurance expense 2 250
Depreciation expense 1 800
Total expenses 55 600
Profit $14 000

Frog Ltd
Calculation of retained earnings

for the year ended 30 June 2015

Retained earnings, 1 July 5 600

14 000
Add: Profit
19 600
Less: Dividends (-)
Retained earnings, 30 September $19 600

5
 Frog Ltd
Statement of financial position
as at 30 June 2015
$ $
Assets
Current assets
Cash 14 500
Accounts receivable 14 100
Office supplies 1 050
Prepaid insurance 3 750
Total current assets 33 400
Non-current assets
Equipment 18 000
Less: Accumulated depreciation – equipment (5 400)
Total non-current assets 12 600
Total assets 46 000
Liabilities
Accounts payable 8 700
Salaries payable 1 650
Rent revenue received in advance 1 050
Total liabilities 11 400
Net Assets $34 600
Equity
Share capital 15 000
Retained earnings 19 600
Total equity $34 600

(c) Frog Ltd

General Journal
Date Account name (narration) Post Ref Debit $ Credit $
2015
June 30 Service Revenue 400 51 900
Rent revenue 410 17 700
Profit or loss summary 330 69 600
(To close revenue accounts)

30 Profit or loss summary 330 55 600

Salaries expense 500 27 150
Office Supplies expense 510 2 400
Rent expense 520 22 000
Insurance expense 530 2 250
Depreciation expense 540 1 800
(To close expense accounts)

30 Profit or loss summary 330 14 000

Retained earnings 310 14 000
(To close profit to retained earnings)

6
PROBLEM SET A 3.5
(a)
Nathan Ltd
General Journal

Date Account name (narration) Post Ref $ $

Debit Credit
2016
Sept 30 Accounts Receivable 110 7 500
Sales Revenue 400 7 500
(To record Sales revenue)

30 Rent Expense 510 7 500

Prepaid Rent 120 7 500
(To record expired rent )

30 Supplies Expense 530 4 500

Supplies 130 4 500
(To record supplies consumed)

30 Depreciation Expense – Equipment 520 6 000

Accumulated Depreciation – Equipment 151 6 000
(To record depreciation expense)

30 Salaries Expense 500 10 800

Salaries Payable 210 10 800
(To record accrued salaries)

30 Interest Expense 550 900

Interest Payable 220 900
(To record interest accrued)

30 Comm Revenue Received in Advance 230 6 600

Commission Revenue 410 6 600
(To record services provided for revenue)

7
(b)
Nathan Ltd
Statement of profit or loss
for the three months ended 30 September 2016

$ $
Revenues:
Sales revenue 85 200
Commission revenue 51 600
Total revenues 136 800
Expenses:
Salaries expense 65 100
Rent expense 22 500
Depreciation expense 6 000
Supplies expense 4 500
Electricity expense 5 250
Interest expense 900
Total expenses 104 250
Profit $32 550

Nathan Ltd
Calculation of retained earnings

for the three months ended 30 September 2016

Retained earnings, 1 July $ -

Add: Profit 32 550
32 550
Less: Dividends (3 000)
Retained earnings, 30 September $29 550

8
 Nathan Ltd
Statement of financial position
as at 30 September 2016

$ $
Assets
Current assets
Cash 114 450
Accounts receivable 12 900
Prepaid Rent 15 000
Supplies 4 500
Total current assets 146 850
Non-current assets
Equipment 120 000
Less: Accumulated depreciation – equipment (6 000) 114 000
Total assets 260 850

Liabilities
Accounts payable 19 200
Salaries payable 10 800
Interest payable 900
Commission revenue received in advance 5 400
Bank loan* 90 000
Total liabilities 126 300
Net Assets $134 550
Equity
Share capital 105 000
Retained earnings 29 550
Total equity $134 550

* bank loan could also be classified as non-current

(c) The following accounts would be closed: Sales Revenue, Commission Revenue, Salaries
Expense, Rent Expense, Depreciation Expense, Supplies Expense, Electricity Expense,
Interest Expense, Dividends.

(d) 1 August 2016. Interest of 6% per year on loan $90 000 = $5 400. Monthly interest is $450
($5400/12) Since total interest expense is $900, the loan has been outstanding for two
months.

(e) Useful live-need to calculate the depreciation rate.

Three months depreciation was $6 000 or $24 000 annually.
Useful life = cost/annual depreciation = $120 000/$24 000= Five years

9
PROBLEM SET A 3.7

Smart Rentals Ltd

Worksheet as at 30 June 2017

(a)
Trial Balance Adjustments Adjusted Trial Statement of profit Statement of financial
Balance. or loss position
No. Account names Dr $ Cr $ Dr $ Cr $ Dr $ C $r Dr $ Cr $ Dr $ Cr $
100 Cash 15 000 15 000 15 000
112 Prepaid Insurance 10 800 2 700 1 8 100 8 100
113 Supplies 11 400 4 200 2 7 200 7 200
120 Land 90 000 90 000 90 000
122 Building 420 000 420 000 420 000
123 Acc’d Depn – Building 1 350 3 1 350 1 350
130 Furniture 100 800 100 800 100 800
131 Acc’d Depn –Furniture 1 125 3 1 125 1 125
200 Accounts Payable 28 200 28 200 28 200
212 Rent Rev Rec’d in Adv 21 600 9 000 5 12 600 12 600
214 Salaries Payable 1 800 6 1 800 1 800
215 Interest Payable 3 150 4 3 150 3 150
220 Mortgage Payable 210 000 210 000 210 000
300 Share Capital 360 000 360 000 360 000
400 Rent Revenue 55 200 9 000 5 64 200 64 200
505 Advertising Expense 3 000 3 000 3 000
506 Depreciation Expense 2 475 3 2 475 2 475
510 Electricity Expense 6 000 6 000 6 000
512 Insurance Expense 2 700 1 2 700 2 700
515 Interest Expense 3150 4 3 150 3 150
525 Salaries Expense 18 000 1 800 6 19 800 19 800
530 Supplies Expense 4 200 2 4 200 4 200
$675 000 $675 000 $23 325 $23 325 $682 425 $682 425
Profit 22 875 22 875
$64 200 $64 200 $641 100 $641 100

10
b)
Smart Rentals Ltd
General Journal

Date Account name (narration) Post Ref Debit $ Credit $

2017
1 June 30 Insurance expense 512 2 700
Prepaid Insurance 112 2 700
(To record expired insurance)

2 30 Supplies Expense 530 4 200

Supplies 113 4 200
(To record supplies consumed)

3 30 Depreciation Expense 506 2 475

Accumulated Depreciation – Building 123 1 350
Accumulated Depreciation – Furniture 131 1 125
(To record depreciation expense for 3 months)

4 30 Interest Expense 512 3 150

Interest Payable 215 3 150
(To record interest accrued ($210,000 x6%)x3/12)

5 30 Rent Revenue Received in Advance 212 9 000

Rent Revenue 400 9 000
(To record June rent)

6 30 Salaries Expense 525 1 800

Salaries Payable 214 1 800
(To record accrued salaries)

(c) Smart Rentals Ltd General Ledger

Cash 100
30/6 Balance 15 000

Prepaid Insurance 112

30/6 Balance 10 800 30/6 Insurance Expense 2 700
30/6 Closing Balance 8 100
10 800 10 800
1/7 Opening Balance 8 100

11
 Supplies 113
30/6 Balance 11 400 30/6 Supplies Expense 4 200
30/6 Closing Balance 7 200
11 400 11 400
1/7 Opening Balance 7 200

Land 120
30/6 Balance 90 000

Building 122
30/6 Balance 420 000

Accumulated Depreciation – Building 123

30/6 Depreciation Expense 1 350

Furniture 130
30/6 Balance 100 800

Accumulated Depreciation – Furniture 131

30/6 Depreciation Expense 1 125

Accounts Payable 200

30/6 Balance 28 200
Rent Revenue Received in Advance 212
30/6 Rent Revenue 9 000 30/6 Balance 21 600
30/6 Closing Balance 12 600
21 600 21 600
1/7 Opening Balance 12 600

Salaries Payable 214

30/6 Salaries Expense 1 800

Interest Payable 215

30/6 Interest Expense 3 150

Mortgage Payable 220

30/6 Balance 210 000

12
 Share Capital 300
30/6 Balance 360 000

Rent Revenue 400

30/6 Balance 55 200
30/6 Rent Revenue in Advance 9 000
64 200
Advertising Expense 505
30/6 Balance 3 000
Depreciation Expense 506
30/6 Accumulated Depreciation 2 475
Electricity Expense 510
30/6 Balance 6 000
512
Insurance Expense
30/6 Prepaid Insurance 2 700
515
Interest Expense
30/6 Interest Payable 3 150
525
Salaries Expense
30/6 Balance 18 000
30/6 Salaries Payable 1 800
19 800
Supplies Expense 530
30/6 Supplies 4 200

13
(d) Smart Rentals Ltd
Adjusted Trial Balance
as at 30 June 2017
No. Account names Debit $ Credit $
100 Cash 15 000
112 Prepaid Insurance 8 100
113 Supplies 7 200
120 Land 90 000
122 Building 420 000
123 Accumulated Depreciation – Building 1 350
130 Furniture 100 800
131 Accumulated Depreciation – Furniture 1 125
200 Accounts Payable 28 200
212 Rent Revenue Received in Advance 12 600
214 Salaries Payable 1 800
215 Interest Payable 3 150
220 Mortgage Payable 210 000
300 Share Capital 360 000
400 Rent Revenue 64 200
505 Advertising Expense 3 000
506 Depreciation Expense 2 475
510 Electricity Expense 6 000
512 Insurance Expense 2 700
515 Interest Expense 3 150
525 Salaries Expense 19 800
530 Supplies 4 200
$682 425 $682 425

(e)
Smart Rentals Ltd
Statement of profit or loss
for the three months ended 30 June 2017
$ $
Revenues:
Rent revenue 64 200
Expenses:
Advertising expense 3 000
Depreciation expense 2 475
Electricity expense 6 000
Insurance expense 2 700
Interest expense 3 150
Salaries expense 19 800
Supplies expense 4 200
Total expenses 41 325
Profit $ 22 875

14
 Smart Rentals Ltd
Calculation of retained earnings
for the three months ended 30 June 2017

Retained earnings, 1 April $ -

Add: Profit 15 450
Retained earnings, 30 June 2017 $15 450

Smart Rentals Ltd

Statement of financial position
as at 30 June 2017

$ $
Assets
Current Assets
Cash 15 000
Prepaid Insurance 8 100
Supplies 7 200
Total current assets 30 300
Non-current assets
Land 90 000
Building 420 000
Less: Accumulated depreciation (1 350) 418 650
Furniture 100 800
Less: Accumulated depreciation (1 125) 99 675
Total non-current assets 608 325
Total assets 638 625

Liabilities
Current Liabilities
Accounts payable 28 200
Rent revenue received in advance 12 600
Salaries payable 1 800
Interest payable 3 150
Total current liabilities 45 750
Non-current Liabilities
Mortgage Payable 210 000
Total liabilities 255 750
Net Assets $382 875
Equity
Share capital 360 000
Retained earnings 22 875
Total equity $382 875

15
(f) The following accounts would be closed: Rent Revenue, Advertising expense, Depreciation
Expense, Electricity Expense, Insurance Expense, Interest Expense, Salaries Expense, Supplies
Expense.

PROBLEM SET A 3.10

(a) Discussed in week 4
Willard Cleaning Ltd
General Journal
Date Account name (narration) Post Debit $ Credit $
Ref.
2017
April 1 Cash 100 37 500
Share Capital 300 37 500
(Issued shares for cash)

1 Motor Vehicles 171 22 500

Cash 100 12 500
Accounts Payable 200 10 000
(Purchased truck)

5 Cleaning Supplies 120 4 875

Accounts Payable 200 4 875
(Purchased cleaning supplies)

7 Prepaid Insurance 130 5 820

Cash 100 5 820
(Paid insurance annual policy July 1)

14 Accounts Receivable 110 6 850

Service Revenue 400 6 850
(Invoiced customers)

21 Accounts Payable 200 12 125

Cash 100 12 125
(Paid accounts payable)

21 Salaries Expense 540 3 400

Cash 100 3 400
(Paid salaries)

23 Cash 100 3 250

Accounts Receivable 110 3 250
(Collected cash from customers on account)

25 Accounts Receivable 110 5 975

Service Revenue 400 5 975
(Invoiced customers)
16
 30 Petrol & Oil Expense 500 432
Cash 100 432
(Paid for petrol and oil)
30 Dividends 315 600
Cash 100 600
(Paid cash dividend)

(b), (e) & (h)

Willard Cleaning Ltd General Ledger

Cash 100
1/4 Share Capital 37 500 1/4 Motor Vehicles 12 500
23/4 Accounts Receivable 3 250 7/4 Prepaid Insurance 5 820
21/4 Accounts Payable 12 125
21/4 Salaries Expense 3 400
30/4 Petrol & Oil Exp 432
30/4 Dividends 600
30/4 Closing Balance 5 873
40 250 40 250
1/5 Opening Balance 5 873

Accounts Receivable 110

14/4 Service Revenue 6 850 23/4 Cash 3 250
25/4 Service Revenue 5 975
30/4 Service Revenue* 1 150 30/4 Closing Balance 10 725
13 975 13 975
1/8 Opening Balance 10 725
* (e) adjusting entry, balance was $10 075 dr before adjusting entry

Cleaning Supplies 120

5/4 Accounts Payable 4 875 30/4 Cleaning Supplies Exp* 4 125
30/4 Closing Balance 750
4 875 4 875
1/8 Opening Balance 750
* (e) adjusting entry, balance was $4 875 dr before adjusting entry

Prepaid Insurance 130

7/4 Cash 5 820 30/4 Insurance Expense* 485
30/4 Closing Balance 5 335
5 820 5 820
1/8 Opening Balance 5 335
* (e) adjusting entry, balance was $5 820 dr before adjusting entry

17
 Motor vehicle 171
1/4 Cash/Accounts Payable 22 500

Accumulated Depreciation – Trucks 172

30/4 Depreciation Expense* 375
* (e) adjusting entry, nil balance before adjusting entry
200
Accounts Payable
21/4 Cash 12 125 1/4 Motor Vehicles 10 000
30/4 Closing Balance 2 750 5/4 Cleaning Supplies 4 875
14 875 14 875
1/8 Opening Balance 2 750

Salaries Payable 210

30/4 Salaries Expense* 1 200

* (e) adjusting entry, nil balance before adjusting entry

Share Capital 300

1/4 Cash 37 500

Retained Earnings 310

30/4 Dividends 600 30/4 Profit or loss summary 3 958
30/4 Closing Balance 3 358
3 958 3 958
1/8 Opening Balance 3 358

Dividends 315
30/4 Cash 600 30/4 Retained Earnings 600

Profit or loss summary 320

30/4 Expenses 10 017 30/4 Revenue 13 975
30/4 Retained Earnings 3 958
13 975 13 975
Entries to this account are closing entries. It has a nil balance before and after closing entries because the
balance, profit, is closed to retained earnings,

Service Revenue 400

30/4 Profit or loss summary 13 975 14/4 Accounts Receivable 6 850
25/4 Accounts Receivable 5 975
30/4 Accounts Rec’ble* 1 150
13 975 13 975
* (e) Adjusting entry,$12825 cr balance before adjusting entry, $13975 cr after adjustment, before closing

18
 Petrol & Oil Expense 500
30/4 Cash 432 30/4 Profit or loss summary 432

Cleaning Supplies Expense 510

30/4 Cleaning Supplies* 4 125 30/4 Profit or loss summary 4 125

* (e) Adjusting entry, nil balance before adjusting entry, $4 125 dr after adjustment, before
closing

Depreciation Expense 520

30/4 Accumulated Depreciation* 375 30/4 Profit or loss summary 375

* (e) adjusting entry, nil balance before adjusting entry

Insurance Expense 530

30/4 Prepaid Insurance* 4850 30/4 Profit or loss summary 485

* (e) Adjusting entry, nil balance before adjusting entry, $485 dr after adjustment, before closing

Salaries Expense 540

21/4 Cash 3 400 30/4 Profit or loss summary 4 600
30/4 Salaries Payable* 1 200
4 600 4 600
* (e) adjusting entry, $3400 dr balance before adjusting entry, $4600 dr after adjusting entry
before closing.

19
(c) & (f)

Willard Cleaning Ltd

Trial Balance
as at 30 April 2017
(c) Unadjusted (f) Adjusted
No. Account name Debit $ Credit $ Debit $ Credit $
100 Cash 5 873 5 873
110 Accounts Receivable 9 575 10 725
120 Cleaning Supplies 4 875 750
130 Prepaid Insurance 5 820 5 335
171 Motor Vehicles 22 500 22 500
172 Accumulated Depreciation – Motor 375
vehicles
200 Accounts Payable 2 750 2 750
210 Salaries Payable 1 200
300 Share Capital 37 500 37 500
310 Dividends 600 600
400 Service Revenue 12 825 13 975
500 Petrol & Oil Expense 432 432
510 Cleaning Supplies Expense 4 125
520 Depreciation Expense 375
530 Insurance Expense 485
540 Salaries Expense 3 400 4 600
$53 075 $53 075 $55 800 $55 800

20
(d) Willard Cleaning Ltd
General Journal
Date Account name (narration) Post ref. Debit $ Credit $
1. April 30 Accounts Receivable 110 1 150
Service Revenue 400 1 150
(Accrued revenue)
2. 30 Depreciation Expense 520 375
Accumulated Depreciation 172 375
(Depreciation expense)
3. 30 Insurance Expense 530 485
Prepaid Insurance 130 485
(Prepaid insurance expired)
4. 30 Cleaning Supplies Expense 510 4 125
Cleaning Supplies 120 4 125
(Supplies used)
5. 30 Salaries Expense 540 1 200
Salaries Payable 210 1 200
(Accrued salaries)

(g)

Willard Cleaning Ltd

Statement of profit or loss
for the month ended 30 April 2017
$ $
Revenues:
Service revenue 13 975
Expenses:
Salaries expense 4 600
Cleaning supplies expense 4 125
Depreciation expense 375
Petrol & Oil expense 432
Insurance expense 485
Total expenses 10 017
Profit $3 958

Willard Cleaning Ltd

Calculation of retained earnings
21
 for the month ended 30 April 2017

Retained earnings 1 April $ -

Add: Profit 3 958
3 958
Less: Dividends ( 600)
Retained earnings 30 April $3 358

Willard Cleaning Ltd

Statement of financial position
as at 30 April 2017

$ $
ASSETS
Current assets
Cash 5 873
Accounts receivable 10 725
Cleaning supplies 750
Prepaid insurance 5 335
Total current assets 22 683
Non-current assets
Motor Vehicles 22 500
Less: Accumulated depreciation (375)
Total non-current assets 22 125
Total assets 44 808
LIABILITIES
Current liabilities
Accounts payable 2 750
Salaries payable 1 200
Total liabilities 3 950
NET ASSETS $40 858
EQUITY
Share capital 37 500
Retained earnings 3 358
TOTAL EQUITY $40 858

22
(h) Willard Cleaning Ltd
General Journal

Date Account name (narration) Post Debit $ Credit $

Ref
July 31 Service Revenue 400 13 975
Profit or loss summary 320 13 975
(Close revenue accounts)

31 Profit or loss summary 320 10 017

Petrol & Oil Expense 500 432
Cleaning Supplies Expense 510 4 125
Depreciation Expense 520 375
Insurance Expense 530 485
Salaries Expense 540 4 600
(Close expense accounts)

31 Profit or loss summary 320 3 958

Retained Earnings 310 3 958
(Close Profit or loss summary account)

31 Retained Earnings 310 600

Dividends 315 600
(Close dividends account)

(i)

Willard Cleaning Ltd

Post-Closing Trial Balance
as at 30 April 2017
No. Account name Debit $ Credit $
100 Cash 5 873
110 Accounts Receivable 10 725
120 Cleaning Supplies 750
130 Prepaid Insurance 5 335
171 Motor vehicles 22 500
172 Accumulated Depreciation – MV 375
200 Accounts Payable 2 750
210 Salaries Payable 1 200
300 Share Capital 37 500
310 Retained Earnings 3 358
$45 183 $45 183

23
PROBLEM SET A 3.10 (j)

Willard Cleaning Ltd

Worksheet as at 30 April 2017

Prepare +adjusting entries and adjusted trial balance using a worksheet.
Trial Balance Adjustments Adjusted Statement of profit Statement of
Trial Balance. or loss Financial Position
No. Account names Dr $ Cr $ Dr $ Cr $ Dr $ Cr $ Dr $ Cr $ Dr $ Cr $
100 Cash 5 873 5 873 5 873
110 Accounts receivable 9 575 1 150 10 725 10 725
120 Cleaning Supplies 4 875 4 125 750 750
130 Prepaid insurance 5 820 485 5 335 5 335
171 Motor vehicles 22 500 22 500 22 500
172 Accumulated Depreciation 375 375 375
200 Accounts Payable 2 750 2 750 2 750
210 Salaries Payable 1 200 1 200 1 200
300 Share Capital 37 500 37 500 37 500
310 Retained earnings
315 Dividends 600 600 600
320 Profit or loss summary
400 Service Revenue 12 825 1 150 13 975 13 975
500 Petrol & oil expense 432 432 432
510 Cleaning Supplies Expense 4 125 4 125 4 125
520 Depreciation Expense 375 375 375
530 Insurance Expense 485 485 485
540 Salaries Expense 3 400 1 200 4 600 4 600

Profit 3 958 3 958

Totals $53 075 $53 075 $7 335 $7 335 $55 800 $55 800 $13 975 $13 975 $45 783 $45 783

24