QUESTION 2- This question has 4 parts (11 marks = 22 minutes)

Katecommencedbusinessasasoletraderunderthename"MugLover"on1December,2018. MugLoverisregisteredforGST.

MugLoverisbasedinBurwood,VIC,andhasbecomeoneofthelargestmugwholesalersinthearea. ThefollowingtransactionsoccurredduringthemonthofJanuary2019:

Note: GST needs to be accounted for.

2

The business borrowed $70,000 from the Westpac at 5% annual interest rate.

9

The business purchased $3,652 of inventory on credit (including GST), net 15.

16

The business purchased office equipment with cash for $6,600 (including GST).

The equipment is expected to have a useful life of 5 years with $0 salvage value.

23

Provided $9,900 of credit sales (including GST). The cost price of the goods sold was $3,070.

24

Thebusinessreturnedunwantedinventorycosting$154(includingGST)purchasedon9January.

25

The business paid the remaining balance for its inventory purchase made on 9 January.

27

The business owner withdrew $4,000 for personal use.

31

Kate paid salaries to her sales staff for the month (Gross salary of $4,320; PAYG of $1,430).

31

Recorded the depreciation of the office equipment.

Assume depreciation is for half a month in the month of purchase.

Required:

(1)Postrelevantentriestothe'CashatBank'ledgerandcalculatetheclosingbalance.

(4 marks = 8 minutes)