WEEK 2_ ACCY112: JOURNAL, LEDGER AND TRIAL
BALANCE
Question 1
On 1 July 2015 Nicole Andreou opened a beauty parlour. The following transactions occurred
during the first month of operations (ignore GST):
July
2
2
3
4
6
16
20
23
28
31
31
Andreou invested $120 000 in the business by depositing cash into a
business cheque account with the Eastpac Bank.
Paid $1800 for the first month’s rent.
Purchased equipment by an online bank transfer for $32 000 and signing
a commercial loan agreement for $38 000.
Purchased supplies for $8400.
Paid advertising expense of $890.
Recorded beauty services revenue for the first half of the month of $3250
in cash and $620 on credit.
Paid insurance expense for July of $480 using an online bank transfer.
Received a $140 payment from customers who paid on credit in the first
half of the month.
Andreou withdrew $560 cash for personal living expenses.
Recorded revenue for the second half of the month of $3680 in cash and
$580 on credit.
Paid telephone account of $330 by electronic transfer.
Use the following account titles and numbers: Cash at Bank, 100; Accounts Receivable, 101;
Supplies, 102; Equipment, 103; Loan Payable, 200; Nicole Andreou, Capital, 300; Nicole
Andreou, Drawings, 301; Revenue, 400; Rent Expense, 500; Advertising Expense, 501;
Insurance Expense, 502; Telephone Expense, 503.
Required
A.
B.
C.
Prepare the general journal entries to record the transactions.
Post the entries from the general journal to the general ledger accounts (running balance
format) and enter the posting references in the general journal.
Prepare a trial balance as at 31 July 2015.
1
A.
General Journal
July
2
Cash at Bank
100
Nicole Andreou, Capital
120 000
300
120 000
Cash invested by owner.
2
Rent Expense
500
Cash at Bank
1 800
100
1 800
Rent paid.
3
Equipment
103
70 000
Cash at Bank
100
32 000
Loan Payable
200
38 000
Equipment purchased for cash and loan
payable.
4
Supplies
102
Cash at Bank
8 400
100
8 400
Supplies purchased.
6
Advertising Expense
501
Cash at Bank
100
890
890
Cash paid for advertising.
16
Cash at Bank
100
2
3 250
Accounts Receivable
101
Revenue
620
400
3 870
Revenue for first half of month
20
Insurance Expense
502
Cash at Bank
480
100
480
Cash paid for insurance
23
Cash at Bank
100
Accounts Receivable
140
101
140
Receipt of payment from customers
28
Nicole Andreou, Drawings
301
Cash at Bank
560
100
560
Drawings by owner
31
Cash at Bank
100
3 680
Accounts Receivable
101
580
Revenue
400
4 260
Revenue for second part of month
31
Telephone Expense
503
Cash at Bank
100
Telephone expenses paid
3
330
330
B.
ACCOUNT: Cash at Bank
Date
Explanation
2015
2
7
2
7
3
7
4
7
6
7
16 7
20 7
23 7
28 7
31 7
31 7
Nicole Andreou, Capital
Rent Expense
Equipment
Supplies
Advertising Expense
Revenue
Insurance Expense
Accounts Receivable
Nicole Andreou, Drawings
Revenue
Telephone Expense
Account No. 100
Post
Ref
Debit
Credit
120 000
1 800
32 000
8 400
890
3 250
480
140
560
3 680
330
ACCOUNT: Accounts Receivable
Date
Explanation
Post
Ref
Debit
Credit
620
140
580
ACCOUNT: Supplies
Explanation
Post
Ref
Debit
Credit
8 400
ACCOUNT: Equipment
Explanation
Balance
620
480
1 060
Account No. 102
2015
4
7 Cash at Bank
Date
120 000
118 200
86 200
77 800
76 910
80 160
79 680
79 820
79 260
82 940
82 610
Account No. 101
2015
16 7 Revenue
23 7 Cash at Bank
31 7 Revenue
Date
Balance
Balance
8 400
Account No. 103
Post
Ref
2015
3
7 Cash and Loan Payable
Debit
70 000
ACCOUNT: Loan Payable
Credit
Balance
70 000
Account No. 200
4
Date
Explanation
Post
Ref
Debit
Credit
2015
3
7 Equipment
38 000
ACCOUNT: Nicole Andreou, Capital
Date
Explanation
Post
Ref
Debit
Credit
120 00
0
ACCOUNT: Nicole Andreou, Drawings
Explanation
Post
Ref
Debit
Credit
560
ACCOUNT: Revenue
Explanation
Post
Ref
Debit
Post
Ref
Debit
Credit
1 800
ACCOUNT: Advertising Expense
Explanation
Post
Ref
Debit
3 870
8 130
Balance
1 800
Credit
890
ACCOUNT: Insurance Expense
Explanation
Balance
Account No. 501
2015
6
7 Cash at Bank
Date
Credit
Account No. 500
2015
2
7 Cash at Bank
Date
Balance
560
3 870
4 260
ACCOUNT: Rent Expense
Explanation
120 000
Account No. 400
2015
16 7 Cash and Accounts Receivable
31 7 Cash and Accounts Receivable
Date
Balance
Account No. 301
2015
28 7 Cash at Bank
Date
38 000
Account No. 300
2015
2
7 Cash at Bank
Date
Balance
Balance
890
Account No. 502
Post
Ref
2015
5
Debit
Credit
Balance
20
7 Cash at Bank
480
ACCOUNT: Telephone Expense
Date
Explanation
480
Account No. 503
Post
Ref
Debit
2015
31 7 Cash at Bank
Credit
330
Balance
330
C.
NICOLE ANDREOU BEAUTY SALON
Trial Balance
as at 31 July 2015
Account
Account
No.
Debit
Credit
Cash at Bank
100
$82 610
Accounts Receivable
101
1 060
Supplies
102
8 400
Equipment
103
70 000
Loan Payable
200
$38 000
Nicole Andreou, Capital
300
120 000
Nicole Andreou, Drawings
301
Revenue
400
Rent Expense
500
1 800
Advertising Expense
501
890
Insurance Expense
502
480
Telephone Expense
503
330
560
8 130
$166 130
6
$166 130
Question 2 (Classwork)
Carrying Your Load provides heavy freight services with large trucks. The following
transactions were Carrying Your Load. Ignore GST.
July
1
2
4
5
9
10
12
12
13
14
Craig Dienhoff invested $620 000 into Carrying Your Load organised to
provide trucking services to remote parts of Australia.
Purchased a truck for $540 000 on credit from P. Strickland.
Transferred the amount owing to P. Strickland using online banking
facilities to make a direct bank transfer.
Paid $1600 to R. Burton for two weeks rent to 14 July.
Charged White Cattle Station $12 000 for trucking services.
Dienhoff withdrew $4000 cash to meet personal expenses.
Paid $1200 for advertising on local radio.
Received $6200 from Outback Oil for trucking services.
Charged Star Company $9600 and received $9000 from Hardie Company
for trucking services provided.
Received a cheque for $12 000 from White Cattle Station and deposited it
into the business bank account. Paid $8800 for fuel for the truck.
Required
A.
Record all transactions directly into ledger T accounts and prepare a trial balance.
B.
Repeat requirement A assuming that a GST of 10% needs to be added for all appropriate
transactions.
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Question 3 (Classwork)
The Arid Sands Golf Club was opened for business on 1 July by Todd Simpson. The following
selected events and transactions occurred during the first month of operations:
July
1
3
6
10
18
19
25
27
29
30
31
The owner invested $2 500 000 cash into the business.
Acquired the business of Jeffrey’s Golf World for $1 800 000 cash. The
price consisted of land $1 000 000, building $650 000, and equipment $150
000.
Advertised the opening of the golf course, paying advertising expenses of
$36 000 for a major television campaign.
Paid cash $36 000 for a 1-year insurance policy.
Purchased new golfing equipment for $60 000 from Rory Golfing, payable
in 30 days.
Received golf membership fees of $22 000 in cash.
Sold 200 coupon books for $400 each. Every book contains 10 coupons
each of which entitles the holder to one round of golf.
Simpson withdrew $10 000 cash for personal use.
Paid wages of $12 600.
Paid Rory Golfing in full.
Received $12 000 cash for golf fees.
Required
Prepare general journal entries for the month of July, using appropriate account titles. Ignore
GST.
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