(Note: Although this question is based on the Skate 'n' Surf business the accounts, amounts and transactions involved may differ between questions. Please read each question separately.) Skate ''n' Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader. The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employee's wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis. The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting. Accounting records The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier. Chart of accounts The chart of accounts for Skate 'n' Surf contains the accounts and account numbers below. 100 110 120 130 171 172 200 210 220 230 300 310 320 400 410 420 Cash at bank Accounts receivable Inventory Prepaid insurance Shop equipment (cost) Accumulated depreciation - shop equipment Accounts payable PAYG withholding payable Superannuation payable Bank loan Capital Drawings Profit or loss summary Sales revenue Sales returns and allowances Discount received 500 600 610 620 630 640 650 660 670 680 690 Cost of sales Advertising expense Depreciation expense Discount allowed Electricity expense Insurance expense Interest expense Postage and stationery expense Superannuation expense Telephone expense Wages expense June 11 12 12 The owner opened a bank account for the business with a deposit of $31,000. This is capital provided by him. Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $31,000 and computer equipment for the shop from Computer Wizards for $6,000. These were paid for with a loan of $34,500 from the bank and cheque for $2,500 from the business bank account. The bank loan is repayable over 4 years. Paid $3,960 for a 1-year insurance policy covering fire, theft, and public liability. Paid $1,000 to Local Newspapers for advertising for the shop for the month. Purchased inventory (skateboards and protective gear) from Excitement Plus for $22,000 on terms on net 30. Purchased surfboards and wetsuits from Surf Imports for $19,000 on terms of 10/10, n/30. Credit sale to Serious Fun of skateboards and protective gear for $5,400 (cost of sales $2,100). This customer was given terms of 5/10, n/30. Cash sale of a skateboard and protective gear for $510 (cost of sales $300). Cash purchase of postage stamps and stationery from Australia Post for $120. Credit sale to Surfing World of various inventory items for $7,920 (cost of sales $4,200). Terms net 30. Returned some protective gear to Excitement Plus that was faulty and received an adjustment note (credit note) from them for $160. 13 14 17 23 24 24 25 27 30 30 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. Paid Surf Imports the amount owing to them less the prompt payment discount. Credit sale to Academy Diving School of 16 wetsuits at a discounted price of $300 each on terms of net 15. Cost of sales $4,000. Paid Excitement Plus $4,400 of the amount owing to them. Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $300 each that was not the size they required. The cost of the wetsuit to us was $250 and it was put back into inventory. Purchased wetsuits from Surf Imports for $9,100 on terms of 10/10, n/30. Credit sale to Serious Fun of skateboards for $8,000 (cost of sales $3,800). Terms 5/10,n/30. Received and banked a cheque from Academy Diving School for the amount owing by them. A repayment of $1,100 was made on the bank loan. The owner cashed a cheque for $750 to pay wages to Scott Walker the sales assistant of $800 less PAYG Withholding of $50. The end of month adjustments are below. a. Depreciation on shop equipment for the month is 20% p.a. prime cost (straight line). b. One-twelfth of the insurance expired. c. Superannuation payable for the month is 10% of the gross wages paid. d. Interest charged on the bank loan for the month was $158. The transactions above have been journalised and posted. The statement or profit or loss for June is below. Skate 'n' Surf Statement of profit or loss for the period 1 June to 30 June 20XX Revenue Sales revenue Sales revenue 26,630 Less: Sales returns and allowances 300 Net sales revenue 26,330 Less: Cost of sales 14,150 Gross profit 12,180 Other revenue: Discount received 1,900 14,080 Expenses Advertising expense 1,000 Advertising expense 1,000 Depreciation expense 617 Discount allowed 270 Insurance expense 330 Interest expense 158 Postage and stationery expense 120 Superannuation exepnse 76 Wages expense 800 Total expenses 3,371 Journalise end-of-year closing entries. (Note: Enter debit entries first, followed by credit entries in the general journal. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Leave blank any answer fields that do not require an answer. Enter accounts following the order of accounts given in the statement of profit or loss.)