In: Accounting
Otho owns a pet shop, Nero Enterprises.
The entity uses the perpetual inventory system to manage its inventory. All inventory sold is sold at 33% markup on cost.
Nero Enterprises is not registered as a VAT vendor, as the annual turnover is not expected to exceed R1 000 000. The entity also decided not to voluntary register for VAT.
The following is a summary of the source documents you received from Otho for April 2020:
1 The owner, Otho, deposited R46 000 in the bank as a further capital contribution. Receipt no. 116: Cash sales, R17 024.
3 Cheque no. 197: Purchased a computer from Pertinax for R14 000.
6 Supplier invoice C0222: Purchased inventory from Commodus, R38 000. Cheque no. 198: Paid the municipality for rates, R11 160.
13 Credit invoice 1120: Sales to Mr Galba, R12 768.
14 Cheque no. 199: Payment to Commodus for 50% of the invoice received on 6 April 2020.
15 Supplier invoice P6811: Received from Nexis for cleaning material, R2 000, as well as trading inventory, R28 657.
20 Cheque no. 200: Purchased inventory from Ela, R14 916.
28 Receipt no. 117: Received R10 100 from Mr Severus, a debtor. Receipt no. 118: Cash sales, R11 172. This amount was banked with the money as per receipt no. 117.
29 Credit invoice 1121: Issued to Macrinus, R18 221.
30 Cheque no. 201: Cash salaries for the month, R16 860. On
inspection of the bank statement, it is noted that the following
transactions are reflected only on the bank statement: deposit of
R198 as interest on the favourable bank balance and R85 as the
monthly bank fees.
Required: Record the transactions in the correct subsidiary
journals. (show all workings)
2.1. Cash Receipts Journal
2.2. Cash Payments Journal
2.3. Debtors/Sales Journal
2.4. Creditors/Purchases Journal
CASH/BANK PAYMENTJOURNAL
1) (CONTRA ENTRY) BANK A/C DR---- 46000
TO CASH 46000
( BEING CASH DEPOSIT INTO BANK VIDE Receipt no. 116 )
2) COMPUTER A/C DR---14000
TO BANK 14000
( BEING Cheque no. 197 FOR Purchased a computer from Pertinax )
3) MUNCILPAL TAXES A/C--- DR 11160
TO BANK 11160
( BEING PAYMENT TO MUNICIPALITY VIDE CHEQUE NO 198)
4) COMMODO A/C DR---- 18000
TO BANK 18000
( BEING PAYMENT OT COOMODO VIDE Cheque no. 199 )
5) PURCHASES A/C DR----14916
TO BANK 14916
( BEING INVENTORY PURCHASED VIDE Cheque no. 200)
6) SALARIES A/C DR--- 16860
TO BANK 16860
( BEING SALARIES PAID VIDE Cheque no. 201)
7) (CONTRA ENTRY) BANK A/C DR-11172
TO CASH 11172
(BEING CASH DEPOSIT INTO BANK VIDE receipt no. 117 )
8) BANK CHARGES DR--- 85
TO BANK 85
( BEING MONTHLY BANK CHARGES RECORDED)
CASH/BANK RECEIPTJOURNAL
1) (CONTRA ENTRY) BANK A/C DR---- 46000
TO CASH 46000
( BEING CASH DEPOSIT INTO BANK VIDE Receipt no. 116 )
2) CASH A/C DR----17024
TO SALES 17024
(BEING CASH SALE MADE)
3) CASH A/C DR--- 10100
TO Mr Severus 10100
(BEING CASH RECEIVED FROM MR. SEVERUS VIDE Receipt no. 117)
4) CASH DR---11172
SALES 11172
(BEING CASH SALES MADE)
5) (CONTRA ENTRY) BANK A/C DR-11172
TO CASH 11172
(BEING CASH DEPOSIT INTO BANK VIDE receipt no. 117 )
6) BANK A/C DR---198
TO BANK INTEREST 198
(BEING BANK INT RECORDED)
Debtors/Sales Journal
1) MR. GABLA A/C DR-----12768
TO SALES 12768
( BEING CREDT SALE MADE VIDE Credit invoice 1120 )
2) Macrinus DR-- 18221
TO SALES 18221
( BEING CREDT SALE MADE VIDE Credit invoice 1121)
Creditors/Purchases Journal
1) PURCHASES A/C--DR 38000
TO COMMODU 38000
( BEING CREDIT PURCHASE MADE VIDE Supplier invoice C0222 )
2) CLEARING MATERIAL DR---2000
TO NEXIS 2000
( BEING MATERIAL PURCHASED ON CREDIT VIDE Supplier invoice P6811 )