The financial year for Crystal Catering Services ends on 30 June. After analysing the accounting records...

The financial year for Crystal Catering Services ends on 30 June. After analysing the accounting records and other data for the business of Crystal Catering Services, the following information is made available for the year ended 30 June 2020.

Crystal Catering Services sub-lets space in its building of $2,400 (excluding GST) per month. Crystal Catering Services has not received the rent for June 2020.
Crystal Catering Services borrowed $15,000 from Metro Bank on 2 February 2020. The principal, plus 5% pa interest, is payable on 15 August. Accrued interest on 30 June has not been recorded.
The sales assistant earns $130 per day. She will be paid on 3 July for the 5-day period ending 3 July 2020. Accrued wages for sales assistant on 30 June has not been recorded.
On 18 May, Crystal Catering Services received an advance from a customer for services totalling $890 (plus GST). This was recorded in the unearned cleaning revenue. The services were provided on 26 June 2020.
Crystal Catering Services purchased a 6-month insurance policy for $1,200 (plus GST) on 1 May 2020. The purchase of this was recorded by debiting Prepaid Insurance.
Repairs to Crystal Jone’s, the owner of Crystal Catering Services, private motor vehicle of $620 was debited to the Vehicles expense account.

Required:

Using the information above, make the necessary adjusting entries for Crystal Catering Services for the year ended 30 June 2020.

Solutions

Expert Solution


Adjusting Entries
Date	Account Titles	Debit $	Credit $
30 June. 2020	Rent Receivable	2,400
	Rent Revenue		2,400

30 June. 2020	Interest Expense	308
	Interest Payable		308
	(15,000 x 5% x 150)/365

30 June. 2020	Salaries Expense	260
	Salaries Payable		260
	( 130 x 2 )

30 June. 2020	Unearned Cleaning Revenue	890
	Clearning Revenue		890

30 June. 2020	Insurance Expense	400
	Prepaid Insurance		400
	( 1,200 x 2 ) /6

30 June. 2020	Crystal Jone's , Drawings	620
	Vehicles Expense		620


* Note- GST has been ignored in absence of GST rate.

ekkarill92 answered 1 year ago

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