To Boldly Go is a retail store that is owned and operated by William Riker and specialises
Question:
“To Boldly Go” is a retail store that is owned and operated by William Riker and specialises in astronomy books and telescopes. The following trial balance has been prepared for the year ended 30 June 2021.
The following additional information is also provided for the year ended 30 June 2021:
- A physical stocktake of inventory on 30 June 2021 revealed $146,160 on hand.
- It is estimated that 2.5% of the 30 June 2021 balance of Accounts Receivable will not be received.
- $69,600 of the recorded sales represents payments for goods which will not be delivered until August 2021.
- Both the Photocopier and Book Shelving are expected to be used evenly over their useful lives. The expected total useful lives and residual values of both assets are as follows:
Useful life
Residual Value
Book Shelving
10 years
$2,000
Photocopier
4 years
$600
- The firm’s insurance is paid in advance and initially recorded as Prepaid Insurance.
The last insurance payment made was for 6 months commencing 1 March 2021. To Boldly Go paid $9,000 on 1January 2021 to the “Daily Astronomer” magazine. This payment was for a full-page advertisement that would appear in each of the 12 monthly editions of the magazine that would be published in 2021 (Jan-Dec). This was recorded as Advertising Expense at the time it was paid.
Upon receipt of the business’s bank statement, William realised that the business had earned $224 interest on 30 June 2021. This amount was deposited directly into the business’s bank account by the bank but has not yet been recorded in the businesses accounting records.
Bookkeepers’ wages owing but not paid as at balance day equals $10,400.
Based on the information provided above, record any necessary adjusting journal entries.
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina