Question

Practical Completion Point 2

This section of the practical is designed to allow you to compare how a basic General Journal and Ledger System operates with a system of Specialised Journals. You should be taking note of the different data entry processes and the efficiencies that can be achieved as well as any difficulties that arise with the more complex system.

You have been provided with an excel file which contains the General Journal and Ledger Accounts. The necessary accounts as well as blank accounts to be used if needed have been included. You will need to complete this task by entering the relevant information into the excel spreadsheet provided. The opening and reversing entries have been completed for you.

You will be re-entering the transaction data from Completion Point 1 as well as a number of new transactions into the “new” system using specialised journals.

Task 1

Using the excel file provided for Completion Point 2 you must enter all the transactions below into the Specialised Journals and then update the Ledger accounts as required. (The transactions below include previous transactions that you have completed using only the General Journal and a number of new transactions). At the end of the month any appropriate adjustments should be made and all temporary accounts should be closed.

Transactions

July 1              Purchased 10 Hand Woven Rugs from Rugs in the Air. Each rug cost $330 (including GST).

July 2              Sold 25 Table Lamps to Arabian Night Lights for $58 each (net of GST).

July 5              Made a cash sale of 3 rugs to Iago Bird for $750 each (net of GST)

July 8              Paid the full amount owed to Jars from Afar less a 5% discount for early payment.

July 10            Sold 60 candles to Agro’s Bazzar for $40 each (net of GST).

July 12            Received $620 cash (net of GST) from Ms Jasmine Rajah for completing a home inspection and interior design options report.     

July 13            Paid all employees their fortnightly wages. The total cash payment was $2,200 (GST Free)

July 15            Purchases 50 “Scents of the Desert” candles for $25 each from Tarnished Lamps. An additional delivery charge of $50 was incurred. (All amounts are net of GST)

Transactions continued

July 17            Cash Sale to Mr G Knee of 5 Table Lamps for a total of $319 (including GST)

July 17            Received a cheque from Genieus Home Ideas being full settlement of their account.

July 21            Paid the $385 owing to the “Camel Masters” for vehicle maintenance completed in June.

July 21            Made a cash purchase of $180 stationery (net of GST) from Quills and Inks Emporium.

July 24            Sold 5 rugs to “Just the Palace” for a total of $3750. (net of GST)

July 26            Al Adin withdrew $1,200 cash for personal use.

July 27            Paid all employees their fortnightly wages. The total cash payment was $2,200 (GST Free)

July 29            Made a cash payment of $567 (including $27 GST) to Connecting U for the last two months telephone usage.

A stocktake on July 31 reveals $3,480 worth of inventory on hand and $170 of stationery on hand.

Both prepaid rent and insurance were paid for 12 months in advance on June 30, 2019.

Depreciation is only calculated at the end of the financial year and so no adjustments are required for these accounts.

Task 2

Once you have completed the data entry above, you need complete schedules for Accounts Receivable and Accounts Payable and create a Balance Sheet dated 31 July 2019.

Remember at this point accuracy of data entry is being checked, however the majority of the marks will be awarded based on the fact that all transactions have been entered.

Answer 1

Task 1

Journal			Amount in $
Date	Particular	Amont (Dr.)	Amount(Cr.)
01-Jul	Purchase A/c………………..Dr	300
	GST paid A/c ……………… Dr	30
	To Creditor		330
	(It is assumed that goods is being purchased for credit & GST amount 0f 30 is paid)
02-Jul	Debtor…Dr	1450
	To Sales    [58*25]		1450
	(Being Goods sold)
05-Jul	Cash…Dr	2250
	To Sales    [750*3]		2250
	(Being Goods sold
08-Jul	Creditor Dr.	330
	To Discount(Cash discount received		16.5
	To Cash		313.5
	(Being amount paid)
	It is assumed that hands woven rugs (July 1) has been purchased from Jars against which payment is made
10-Jul	Debtor…Dr	2400
	To Sales    [60*40]		2400
	(Being Goods sold)
12-Jul	Cash…Dr	620
	To Sales		620
	(Being Cash received from Ms Jasmine Rajah for completing a home inspection and interior design options report.
13-Jul	Wages Dr.	2200
	To Cash		2200
	(Being amount paid for wages)
15-Jul	Purchase A/c………………..Dr	1250
	Delivery Charges A/c ……………… Dr	50
	To Creditor		1300
	(Being Goods purchased)
17-Jul	Cash…Dr	319
	To GST payable		19
	To Sales		300
	(Being Cash received for goods sold) (It is assumed that goods is being purchased for credit & GST amount of 19 is charged)
17-Jul	Cash…Dr	1450
	To Debtor		1450
	(Being amount received)
	(It is assumed that payment is received against July 2 Sale of 1450)
21-Jul	Repair & Maintenance Dr.	385
	To Cash		385
	(Being amount paid for Repair & Maintenance)
21-Jul	Stationary A/c………………..Dr	180
	To Cash		180
	(Being Stationary purchased)
24-Jul	Debtor…Dr	3750
	To Sales		3750
	(Being Goods sold)
26-Jul	Drawings…Dr	1200
	To Bank		1200
	(Being amount withdrawn for personal use)
27-Jul	Wages Dr.	2200
	To Cash		2200
	(Being amount paid for wages)
29-Jul	Telephone Charges Dr.	567
	To Cash		567
	(Being amount paid for Telephone Charges)

Task 2

Creditors A/c				Amount
Date	Particulars	Amount	Date	Particulars	Amount
July			July
8	To Cash	313.5	1	By Purchase	300
8	To Discount	16.5	1	By GST paid	30
			15	By Purchase	1250
			15	By Delivery Charges	50
31	To bal c/d	1300
		1630			1630
Debtors A/c				Amount
Date	Particulars	Amount	Date	Particulars	Amount
July			July
1	To bal b/d		17	By Cash	1450
2	To Sale	1450
10	To Sale	2400
24	To Sale	3750
			31	To bal c/d	6150
		7600			7600
Working Note
P&L A/c
Date	Particulars	Amount	Date	Particulars	Amount
July			July
	To Purchase	1550		By Sale (cash+Cr)	10770
	To Disc			By Disc	16.5
	To wages	2200
	To Delivery Charges	50
	To Repair & Maintenance	385
	To Stationary used	10
	(180-170)
	To wages	2200
	To Telephone Charges	567
		0		By Closing Stock	3480
	To Capital (Net Profit)	7304.5
		14266.5			14266.5
Balance Sheet as on 31 July 2019
Liability	Amount	Assets	Amount
		Fixed Assets	0
Capital		GST Receivable(30-19)	11
Less Drawing	-1200	Cash & Bank	-2406.5
Add Profit	7304.5	Stationary	170
Net Capital	6104.5	Closing Stock	3480
Creditors	1300	Debtors	6150
	7404.5		7404.5