Question

Discuss the basic steps in the recording process, using the transaction of Wong Ltd for the month ended 31 October (attached). Your discussion and presentation should include the following:

a) Analysis each transaction in terms of its effect on the accounts.

b) Recording of each transaction information in a journal.

c) Transferring (posting) the journal information to the appropriate accounts in the ledger.

d) Preparation of a trial balance (from account balances in the general ledger). Wong Pty Ltd The following transactions are for it’s first month of operation, October.

(1) Issues shares for cash. On 1 October Wong Pty Ltd issues shares in exchange for $10 000 cash. (2) Borrows money from a bank. On 1 October Wong Pty Ltd borrows $5000 from the ANZ Bank. (3) Purchase of office equipment for cash. On 2 October Wong Pty Ltd acquires office equipment by paying $5000 cash to Superior Equipment Sales Ltd. (4) Receipt of cash in advance from customer. On 2 October Wong Pty Ltd receives a $1200 cash advance from R. Knox, a client. (5) Renders services for cash. On 3 October Wong Pty Ltd receives $10 000 in cash from Copa & Co. for advertising services performed. (6) Payment of rent in cash. On 3 October Wong Pty Ltd pays its office rent for the month of October in cash, $900. (7) Payment of insurance in cash. On 4 October Wong Pty Ltd pays $600 for a 1-year insurance policy that will expire next year on 30 September. (8) Purchase of supplies on credit. On 5 October Wong Pty Ltd purchases an estimated 3-month supply of advertising materials on account from Aero Supply for $2500. (9) Hiring of new employees. On 9 October Wong Pty Ltd hires four new employees to begin work on 15 October. Each employee is to receive a weekly salary of $500 for a 5-day working week, payable every 2 weeks. Employees are to receive their first pay on 26 October. (11) Payment of cash for employee salaries. Employees have worked 2 weeks, earning $4000 in salaries, which are paid on 26 October

Answer 1

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