Ben Cook owns and operates a business called Ben Cook Traders, which sells products to retail outlets
Question:
Ben Cook owns and operates a business called Ben Cook Traders, which sells products to retail outlets throughout the country.
The business has been trading for 10 years. On the3rd July 2014 a fire destroyed the building in which all the accounting documentation was held. All business documentation was burned however, Ben had recently prepared his end of financial year business trial and had kept a copy on his computer at home.
Ben needs to get some documentation completed again and has asked you to do it for him. He has provided you with the trial balance sheet from home and has requested you complete the following tasks:
Record the account balances in the general ledger accounts
Record the adjustment for 30th June 2014 in the general journal
Post the journals to the ledger, including an asset register card for the motor vehicle that was sold through the year. Ben has provided you with acquisition details he obtained from the vehicle supplier
Prepare a trial balance once adjustments have been posted
Record the journal entries to close accounts at 30 June 2014
Post the closing entries to the general ledger
Prepare a trial balance after accounts have been closed
Prepare the financial reports for the year ending 30 June 2014
can someone answer each part separately
Ben has requested that the accounts and reports be prepared in a professional manner and presented within one week.
Ben Cook Traders Trial Balance As at 30 June 2014 | ||
Account name | Debit | Credit |
Advertising | 55000 |
|
Bad debts | 12000 |
|
Bank |
| 30000 |
Buildings | 800000 |
|
Buying expenses | 14800 |
|
Cartage outwards | 120000 |
|
Commission revenue |
| 59900 |
Discount expense | 2500 |
|
Discount received |
| 1800 |
Donations | 5000 |
|
Electricity | 40000 |
|
GST payable |
| 15000 |
Input tax credits | 10000 |
|
Interest expense | 176000 |
|
Lease expense | 6000 |
|
Legal costs | 75000 |
|
Loan BL Finance due 2020 |
| 600000 |
Mortgage |
| 400000 |
Motor vehicle expense | 50000 |
|
Office salaries | 40000 |
|
Manager salaries | 100000 |
|
Wages | 80000 |
|
Office stationary | 4000 |
|
Petty cash advance | 500 |
|
Provision for annual leave |
| 25300 |
Provision for long service leave |
| 15000 |
Purchases | 360000 |
|
Purchases returns and allowances |
| 27000 |
Rates and taxes | 15250 |
|
Rent revenue |
| 300000 |
Sales |
| 900000 |
Stock (1/7/14) | 120000 |
|
Creditors control |
| 50000 |
Debtors control | 80000 |
|
Provision for doubtful debts |
| 2800 |
Equipment | 900000 |
|
Accumulated depreciation - equipment |
| 315000 |
Drawings | 63750 |
|
Motor vehicle | 320000 |
|
Accumulated depreciation - motor vehicle |
| 168000 |
Capital |
| 540000 |
| 3449800 | 3449800 |
Adjustments:
Interest owing on loan $4000
Wages owing to employees $10000
Additional bad debts to be written off (inclusive of GST) $5500
Provision for doubtful debts to be equal to 4% of debtors
Commission revenue yet to be received $5100
The provision for long service leave is to be increased by 3% of all salaries and wages
Provision for annual leave is to be doubled
Advertising paid in advance $5000
Equipment is being depreciated @15% p/a using the reduced balance method depreciation
Motor vehicles are being depreciated @20% p/a using the straight line method of depreciation
- On April 1 2014 one of the vehicles (BMW) Registration number STR333 was traded for $25000 on a new Volvo costing $66000 GST Inc, the balance payable over 3 years financed by a loan from ACG Finance. The BMW was purchased on 1 January 2010 from Smart car sales with an expected life of 5 years with no residual payment
- Cost price INC GST $120000
- Delivery costs INC GST $5000
- Registration and insurance $2500
Note: the disposal of the vehicle has not been recorded in the accounts
Stock on hand @ 30 June 2014 is $100000
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman