Question : Ms Jennie Smiles is the major shareholder and chief executive officer

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Question: Ms Jennie Smiles is the major shareholder and chief executive officer of Celebrations Pty Ltd, a ...

Ms Jennie Smiles is the major shareholder and chief executive officer of Celebrations Pty Ltd, a small business which provides organisation services and supplies for parties, wedding receptions and other happy occasions.

Due to the relatively small size of the business Jennie is unable to justify a computerised accounting system thus all accounting is completed manually by ABC Accounting.

Celebrations Pty Ltd uses a perpetual inventory system, noting the cost of all inventory sold is 65% of the sales (GST exclusive) price.

It is now the end of February 2018 and Jennie requests ABC Accounting to complete all necessary accounting to enable the preparation of a trial balance as at 28 February 2018. As the ABC Accounting accountant assigned to Celebrations Pty Ltd you are requested to complete the following tasks using Excel:

(a) Prepare general journal entries to record the February transactions as identified below. Notations/descriptions are required.

(b) Open general ledger accounts (T-Bar OR Running Balance format) for each account shown on the 31 January 2018 trial balance and
- enter the opening balance (for 1 February 2018) for each account using the balance as shown in the 31 January 2018 Trial Balance.
- Post the entries from the general journal to the general ledger accounts and enter the posting references in the general journal.

(c) Balance off each general ledger account at 28 February and prepare a trial balance as at 28 February 2018.

Ms Smiles has provided a list of the transactions which occurred during the month of February, as well as the business’s trial balance as at 31 January, 2018.

PLEASE NOTE

i) When a discount is received or allowed, you are required to adjust the associated GST Paid or Collected.

ii) Should any GST or discount calculations not result in whole $ values, you can round the result to the nearest whole $.

The transactions for February 2018 were as follows:
   

Note: No end of month adjusting entries are required.

Celebrtaions Pty Ltd

Trial Balance

as at 31 January 2018

Can you please who me where to find the solutions for part B and C. I cannot find them, I have been trying all day and keep editing my question but not getting the solutions. This is a question on this website but I am unable to find all of the solutions can you please help

Date (2018) Transactions 1 February Sold inventory on credit to Wendy’s Parties $3,300 (GST inclusive). Terms 3/7, n/30. Invoice No 1101. 2 February Received $2,570 commission owing from parties organised in January. Issued Receipt No. 350. 3 February Paid Party Supplies $2,760 (Cheque No. 201), after receiving a discount of $88, the amount owing for the purchase of inventory on credit in January. 4 February Cash purchase of office supplies from Discount Office Supplies $1,320 (GST inclusive). Cheque No. 202. 5 February Issued a $330 (GST inclusive) credit to Wendy’s Parties for unsuitable inventory returned. 6 February Received $1,320 (Cheque No. 1020), after allowing a discount of $33, from V. Weeke as payment for a credit sale of inventory made in January. Issued receipt No. 351. 7 February Paid Party Outfits $965 (Cheque No. 203) owing from a January purchase of inventory. 7 February Received $2,881 from Wendy’s Parties being payment for the February 1 sale of inventory. Issued Receipt No. 352. 8 February Cash sale of inventory $1,210 (GST inclusive). Issued Receipt No. 353. 9 February Paid Prime Real Estate Pty Ltd $825 (GST inclusive) for February rent. Cheque No. 204. 10 February Purchased inventory on credit from Weddings R’US $2,860 (GST inclusive). Terms 2/7, n/30. 11 February Obtained a loan of $15,000 from Aunty Phyllis. Principal and interest of 5% pa is to be paid by August 31, 2018. The proceeds were immediately deposited into the bank. NB: there is no need to make allowance for interest payable. 12 February Returned unsuitable inventory $429 (GST inclusive) to Weddings R’US. 13 February Sold inventory on credit to Australiana Entertainers $1,320 (GST inclusive). Terms 2/7, n/30. Invoice No 1102. 14 February Purchased inventory on credit from Party Outfits $1,870 (GST inclusive). Terms 2/7, n/30. 17 February Paid $2,382 (Cheque No. 205) owing to Weddings R’US for the February 10 purchase of inventory. 19 February Purchased inventory from Nuptial Supplies $1,430 (GST inclusive). Paid $800 by cheque (No. 206) as part payment. The remainder of the purchase was on credit. 20 February Received $1,294 owing from Australiana Entertainers, the amount owing on the February 13 sale of inventory. Issued Receipt No. 354. 22 February Cash purchase on inventory $550 (GST inclusive). Cheque No. 207. 24 February Sold inventory on credit to Blinky Bill $1,430 (GST inclusive). Terms 2/7, n/30. Invoice No. 1103. 26 February Paid monthly electricity account to Origin Power $979 (GST inclusive) by cheque (No. 208). 28 February Issued Cheque No. 209 for $1,980 to pay sales consultant’s salary. 28 February The current month’s interest $144 on the bank loan was paid to BAN bank via a direct debit to the business’s bank account. 28 February The current month’s bank charges of $23 was paid via a direct debit to the business’s bank account

Explanation / Answer

P.S. Trial Balance has a difference of $200. Hence we will record a Suspese account credit balance of $200.

I am answering question 2 and question 3 as requested.

Question 2 is answered by preparing ledgers under running balance format

Answer 2

Computation of cost of Sales

Answer 3

1-100 Bank Dr(+)/Cr(-) 1-200 Accounts Receivable Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 39000 1-Feb-18 Opening Balance 15680 2-Feb-18 Commission Receivable 350 2570 41570 1-Feb-18 Sales Revenue 1101 3300 18980 3-Feb-18 Accounts Payable 201 2760 38810 5-Feb-18 Sales Returns & Allowances 1101 330 18650 4-Feb-18 Office Supplies 202 1320 37490 6-Feb-18 Bank 351 1320 17330 6-Feb-18 Accounts Receivable 351 1320 38810 6-Feb-18 Discount Allowed 351 33 17297 7-Feb-18 Accounts Payable 203 965 37845 7-Feb-18 Bank 352 2881 14416 7-Feb-18 Accounts Receivable 351 2881 40726 7-Feb-18 Discount Allowed 352 89 14327 8-Feb-18 Sales Revenue 353 1210 41936 13-Feb-18 Sales Revenue 1102 1320 15647 9-Feb-18 Rent Expense 204 825 41111 20-Feb-18 Bank 354 1294 14353 11-Feb-18 Short Term Loans 5% 15000 56111 20-Feb-18 Discount Allowed 354 26 14327 17-Feb-18 Accounts Payable 205 2382 53729 24-Feb-18 Sales Revenue 1103 1430 15757 19-Feb-18 Inventory 206 800 52929 20-Feb-18 Accounts Receivable 354 1294 54223 22-Feb-18 Inventory 207 550 53673 26-Feb-18 Bank 208 979 52694 28-Feb-18 Salaries Expense 209 1980 50714 28-Feb-18 Interest Expense Direct 144 50570 28-Feb-18 Bank Charges Direct 23 50547 1-210 Provision for Doubtful Debts Dr(+)/Cr(-) 1-300 Commission Receivable Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -1850 1-Feb-18 Opening Balance 2570 2-Feb-18 Bank 350 2570 0 1-400 Inventory Dr(+)/Cr(-) 1-500 Equipment Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 17510 1-Feb-18 Opening Balance 13700 10-Feb-18 Accounts Payable 2860 20370 12-Feb-18 Accounts Payable 429 19941 14-Feb-18 Accounts Payable 1870 21811 19-Feb-18 Bank 206 800 22611 19-Feb-18 Accounts Payable 206 630 23241 22-Feb-18 Bank 207 550 23791 28-Feb-18 Cost of Sales 4505 19286 1-510 Equipment - Accumulated depreciation Dr(+)/Cr(-) 1-600 Office Supplies Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -3560 1-Feb-18 Opening Balance 2320 4-Feb-18 Bank 202 1320 3640 2-100 Accounts Payable Dr(+)/Cr(-) 2-110 GST Collected Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -6880 1-Feb-18 Opening Balance -7230 3-Feb-18 Bank 201 2760 -4120 3-Feb-18 Discount Received 201 88 -4032 7-Feb-18 Bank 203 965 -3067 10-Feb-18 Inventory 2860 -5927 10-Feb-18 Inventory 429 -5498 14-Feb-18 Inventory 1870 -7368 17-Feb-18 Bank 205 2382 -4986 17-Feb-18 Discount Received 205 49 -4937 19-Feb-18 Inventory 206 630 -5567 2-120 GST Paid Dr(+)/Cr(-) 2-200 Short Term Loans Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 4980 1-Feb-18 Opening Balance 0 11-Feb-18 Bank 5% 15000 -15000 2-300 Bank Loans Dr(+)/Cr(-) 3-100 Capital Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -23300 1-Feb-18 Opening Balance -30000 3-200 Retained Earnings Dr(+)/Cr(-) 4-100 Sales Revenue Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -29398 1-Feb-18 Opening Balance -62350 1-Feb-18 Accounts Receivable 1101 3300 -65650 8-Feb-18 Bank 353 1210 -66860 13-Feb-18 Accounts Receivable 1102 1320 -68180 24-Feb-18 Accounts Receivable 1103 1430 -69610 4-110 Sales Returns & Allowances Dr(+)/Cr(-) 4-200 Commissions Revenue Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 1350 1-Feb-18 Opening Balance -12640 5-Feb-18 Accounts Receivable 1101 330 1680 4-300 Discount Received Dr(+)/Cr(-) 5-100 Cost of Sales Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -1200 1-Feb-18 Opening Balance 43645 3-Feb-18 Bank 201 88 -1288 28-Feb-18 Inventory 4505 48150 17-Feb-18 Accounts Payable 205 49 -1337 6-100 Office Supplies Expense Dr(+)/Cr(-) 6-200 Discount Allowed Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 2200 1-Feb-18 Opening Balance 1360 6-Feb-18 Accounts Receivable 351 33 1393 7-Feb-18 Accounts Receivable 351 89 1482 20-Feb-18 Accounts Receivable 354 26 1508 6-300 Salaries Expense Dr(+)/Cr(-) 6-400 Electricity Expense Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 17100 1-Feb-18 Opening Balance 5200 28-Feb-18 Bank 209 1980 19080 26-Feb-18 Bank 208 979 6179 6-500 Rent Expense Dr(+)/Cr(-) 6-600 Depreciation Expense Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 6300 1-Feb-18 Opening Balance 4520 9-Feb-18 Bank 204 825 7125 6-700 Interest Expense Dr(+)/Cr(-) 6-800 Bank Charges Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance 1008 1-Feb-18 Opening Balance 165 28-Feb-18 Bank Direct 144 1152 28-Feb-18 Bank Direct 23 188 9-999 Difference in Trial Balance Dr(+)/Cr(-) Date Particulars P ref Debit Credit Balance 1-Feb-18 Opening Balance -200

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