Question

King Sports owned by Tim Lane, sells sports equipment to schools and sporting clubs in Victoria. The following balances were reported in the Balance Sheet as at 30 June 2019. Account Name Balance ($) Cash at bank 39 400 Accounts receivable 2 800 Accounts payable 1 200 Capital – Tim Lane 41 000 (Note this question continues over the page) 4 Week 8 – Question 3 (Cont’d) Transactions for July 2019 were as follows: July 2 Received $2800 from accounts receivable 3 Paid $1000 of accounts payable 4 Paid rent for July $700 5 Sent invoice to customer $5600 7 Purchased office equipment for cash $2000 9 Recorded cash sales $800 10 Recorded credit sales $1500 14 Purchased office supplies for cash $330 23 Recorded cash sales $2000 31 Cash drawing by Tim Lane $800 Required: a. Prepare worksheet entries for the business transactions for the month ended 31 July 2019. b. Describe how an accounting worksheet assists in the preparation of the statement of profit or loss and the balance sheet.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
July 2	Cash at bank	2,800
	Accounts Receivable		2,800
July 3	Accounts Payable	1,000
	Cash at bank		1,000
July 4	Rent Expense	700
	Cash at bank		700
July 5	Accounts Receivable	5,600
	Sales Revenue		5,600
July 7	Office Equipment	2,000
	Cash at bank		2,000
July 9	Cash at bank	800
	Sales Revenue		800
July 10	Accounts Receivable	1,500
	Sales Revenue		1,500
July 14	Office Supplies	330
	Cash at bank		330
July 23	Cash at bank	2,000
	Sales Revenue		2,000
July 31	Drawings - Tim Lane	800
	Cash at bank		800
	Worksheet
				Income Statement		Balance Sheet
	Description	Debit	Credit	Debit	Credit	Debit	Credit
	Cash at bank	40,170				40,170
	Accounts Receivable	7,100				7,100
	Office Supplies	330				330
	Office Equipment	2,000				2,000
	Accounts Payable		200				200
	Capital – Tim Lane		41,000				41,000
	Drawings - Tim Lane	800				800
	Sales Revenue		9,900		9,900
	Rent Expense	700		700
	Total	51,100	51,100
	Net Income			9,200			9,200
	Total			9,900	9,900	50,400	50,400
The worksheet summarises each business transaction of a period and enables a large number of transactions
to be recorded. Totaling the accounts in the worksheet allows for easy preparations of the income statement
and the balance sheet.