Gadget Store uses a perpetual inventory system on accrual basis to account for smart digital devices that it sells with one year warranty and maintenance services. The business’ unadjusted trial balance as at 28 February 2021 was as follows:

REQUIRED :

At 28 February 2021, the following transactions were found not recorded:

i. Returned 4 digital devices bought on credit from a manufacturer at the original total purchase cost of $4,840 inclusive GST.

ii. Refunded a customer who returned a digital device that was bought it at $1,500 net GST. The item with a cost of $900 net GST was returned into inventory. The following are additional information for month-end adjustments: iii. Additional provision for warranty at 3% of net sales was estimated to be required for the year.

iv. The “Insurance expenses” account is for a payment made earlier in the year for a policy covering 1 January 2021 to 31 December 2021.

 

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Accounts Accounts Payable Accumulated Depreciation - PPE Bank Loan Cash at Bank Cost of Sales GST Payable GST Receivable Insurance Expenses Interest Expenses Inventory Maintenance Fees Prepayments Property, Plant and Equipment (PPE) Provision for Warranty Rent Expenses Salaries Expenses Sales Sales Returns and Allowances Share Capital Supplies Supplies Expenses Unearned Revenue Utilities Expenses Warranty Expenses Total Debit ($) 135,020 376,280 1,570 3,600 2,000 31,000 1,000 44,600 22,910 44,090 30,050 2,100 5,690 4,200 704,110 Credit ($) 14,290 18,235 77,750 1,505 14,800 10,000 501,500 1,500 60,000 4,530 704,110 Accounts Accounts Payable Accumulated Depreciation - PPE Bank Loan Cash at Bank Cost of Sales GST Payable GST Receivable Insurance Expenses Interest Expenses Inventory Maintenance Fees Prepayments Property, Plant and Equipment (PPE) Provision for Warranty Rent Expenses Salaries Expenses Sales Sales Returns and Allowances Share Capital Supplies Supplies Expenses Unearned Revenue Utilities Expenses Warranty Expenses Total Debit ($) 135,020 376,280 1,570 3,600 2,000 31,000 1,000 44,600 22,910 44,090 30,050 2,100 5,690 4,200 704,110 Credit ($) 14,290 18,235 77,750 1,505 14,800 10,000 501,500 1,500 60,000 4,530 704,110

Answer rating: 100% (QA)

i Returned 4 Digital Devices Bought on Credit from a Manufacturer Accounts Payable 4840 GST Payable ... View the full answer