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MAINTAIN A GENERAL LEDGER

and

PROCESS JOURNAL ENTRIES

STUDENT MANUAL

NAME: _____________

Maintain a General Ledger and Process Journal Entries

HIT Newcastle V2.2008 2 GJ and GL Exercises

USING A TRANSACTION ANALYSIS CHART TO UNDERSTAND TRANSACTIONS

� Understanding transactions is fundamental to accounting.

� A transaction analysis chart is a tool to help you understand transactions. It is not

a formal accounting record - just a tool. It will assist you to apply the debit and

credit rules of accounting. This is what a (blank) transaction analysis chart looks

like:

Date Account Category

(PEARL)

Increase

or

Decrease

Amount

$

Debit or Credit

DR

$

CR

$

We will use a chart like this with some practical exercises soon but first let's recap some very important accounting concepts

� An account is a detailed record for every item of value associated with a business.

� There are five categories of accounts. These are: Proprietorship (also known as

Capital or Owner's Equity), Expenses, Assets, Revenue, Liabilities. A simple way to remember the categories of account is the acronym PEARL. Accounts are located in an orderly and logical manner according to their category and can be found summarised (or indexed) in a Chart of Accounts.

� Every business will have a Chart of Accounts which suits its needs. That means

that no two businesses will have exactly the same Chart of Accounts. However, every Chart of Accounts will be similar in that it will have the five categories of accounts. Also, many accounts are commonly used eg Cash at Bank, wages & salaries, loan accounts, capital, sales and so on.

� The most basic accounting equation is Assets = Equities (ie internal and external

liabilities). However, it is more practical to express the equation as: Assets = Liabilities + Proprietorship.

A simple way to remember this is A = L + P. The Balance Sheet report of a business reflects this equation.

If A = L + P then the following must also be true L = A- P and

P = A - L



� The expanded accounting is Assets + Expenses = Proprietorship + Liabilities + Revenue. The Profit & Loss report of a business reflects the revenue and expenses part of this equation.

� The debit and credit rules of accounting are based on the above accounting

equation. The following table may help you to remember the rules:

Remember the following rules:

Type of change Type of Account Type of entry

an increase in an asset or expense ledger

account

is recorded as a debit

entry

whereas a decrease in an asset or expense ledger

account

is recorded as a credit

entry

an increase in a liability or proprietorship or

revenue ledger account

is recorded as a credit

entry

whereas a decrease in a liability or proprietorship or

revenue ledger account

is recorded as a debit

entry

THE OPENING ENTRY

The Opening Entry lists balances for all Assets, Liabilities and Capital at the commencement of the business. The transaction is recorded in the General Journal and then posted to the General Ledger. All General Journal transactions are accompanied by a ‘narration’, which describes the transaction. Activity 1 has been completed for your reference.



ANALYSE THE OPENING ENTRY

(Hint: you need the rules and the accounting equation for these activities - so keep them handy)

Activity 1 - Example Complete a transaction analysis chart to help you prepare the opening general journal entry for the commencement of the company Flip Flop Ltd on 1 November 200X when the owner contributed cash ($5000), stock ($2200), a motor vehicle ($11000), office furniture ($1650), and a loan from the XYZ Bank ($500). (You will need to calculate the amount for the (proprietors) capital account).

Date of transaction

Accounts being

affected

What Category

is the account (PEARL)

Is it an increase

or a decrease

to the account

What is the

amount affecting

the account

$

Will it be a Debit or a Credit entry to the account DR $

CR $

Nov 1 Bank Asset Increase 5 000 5 000

Inventory Asset Increase 2 200 2 200

MV at Cost Asset Increase 11 000 11 000

Off Furn Asset Increase 1 650 1 650

Bank Loans Liability Increase 500 500

Now write up the general journal entry to record the opening entry. (The source of this information is an internal memo dated 1 Nov 200X from the owner). General Journal of Flip Flop Ltd GJI

Date Particulars Fol DR CR

Nov 1 Cash at Bank 1.1 5 000

Inventory 1.4 2 200

MV at Cost 1.14 11 000

Office Furniture at Cost 1.16 1 650

Bank Loans 2.16 500

Capital 3.1 19 350

Being assets, liabilities and capital at this date 19 850 19 850

To calculate Capital: Add Dr and Cr columns and then deduct Cr from Dr; the difference is the Capital. Assets – Liabilities = Capital

Hint - Look at the Chart of Accounts Hint - Look at the Rules Think about it

Indent Credits

Narration



Post the General Journal to the General Ledger; insert Folios for cross reference as you post, eg Journal # in the Ledger and Ledger Account No in the Journal. The particulars information is the opposite account in the transaction. In the opening entry all accounts are opposite to Capital, therefore, Capital is entered but in the Capital account, Sundries is entered. (See below)

GENERAL LEDGER

Cash at Bank 1.1 Date Particulars Folio Debit Credit Balance

Nov 1 Capital GJ1 5 000 00 5 000 dr

Inventory 1.4 Date Particulars Folio Debit Credit Balance

Nov 1 Capital GJ1 2 200 00 2 200 dr

Motor Vehicles at Cost 1.14 Date Particulars Folio Debit Credit Balance

Nov 1 Capital GJ1 11 000 11 000 dr

Office Furniture at Cost 1.16 Date Particulars Folio Debit Credit Balance

Nov 1 Capital GJ1 1 650 1 650 dr

Bank Loans 2.16 Date Particulars Folio Debit Credit Balance

Nov 1 Capital GJ1 500 500 cr

Capital 3.1 Date Particulars Folio Debit Credit Balance

Nov 1 Sundries GJ1 19 350 19 350 cr

Generate a Trial Balance for the month. Note the final balance in the General Ledger is entered in the Trial balance on the same side, eg Debit or Credit.

Trial Balance of Flip Flop As at 1 November 200X

Account No

Account Name

Debit

Credit

1.1 Cash at Bank 5 000 1 4 Inventory 2 200 1.14 MV at Cost 11 000 1.16 Off Furn at Cost 1 650 2.16 Bank Loans 500 3.1 Capital 19 350

Total 19 850 19 850

MUST BE EQUAL



Activity 2

Complete a transaction analysis chart to help you prepare the opening general journal entry for the commencement of the company Wilson's Haberdashery on 15 April 200X when the owner contributed cash ($15,000), materials ($13,200), a motor vehicle ($17,600), office furniture ($3,300), and a loan from the BMI Credit Union ($5,500) and a sundry creditor Robertson ($2,200). (You will need to calculate the amount for the (proprietor’s) capital account).

Date of transaction

Accounts being affected

What Category is

the account (PEARL)

Is it an increase

or a decrease

to the account

What is the amount affecting

the account

$

Will it be a Debit or a Credit entry to the

account DR $

CR $

Now write up a general journal entry to record the opening entry. The source of this information is an internal memo dated 15 April 200X from the Accountant General Journal of Wilson’s Haberdashery GJ1


April 15

Hint - Look at the Chart of Accounts Hint - Look at the Rules Think about it



GENERAL LEDGER Cash at Bank 1.1 Date Particulars Folio Debit Credit Balance



Office Furniture at Cost 1.16 Date Particulars Folio Debit Credit Balance


Sundry Creditor - Robertson 2.6 Date Particulars Folio Debit Credit Balance


Trial Balance of Wilson’s Haberdashery

As at 15 April 200X

Account No

Account Name

Debit

Credit



Activity 3

Complete a transaction analysis chart to help you prepare the opening general journal entry for the commencement of the company Dad & Dave's Bits & Pieces on 10 June 200X when the owner contributed cash ($10,000), stock (18,700), shop fittings ($3,300), a trade debtor Hills ($1,100), and a loan from Barry's Finance ($6,600), and a trade creditor Corrigans ($1,870). (You will need to calculate the amount for the (proprietors) capital account).

Date of transaction

Accounts being

affected

What Category


Is it an increase

or a decrease

to the account

What is the

amount affecting

the account

$


account DR $

CR $

Now write up a general journal entry to record the opening entry. The source of this information is an internal memo dated 10 June 200X from the Financial Controller. General Journal of Dad and Dave’s Bits and Pieces GJ1





Accounts Receivable Control 1.3

Date Particulars Folio Debit Credit Balance



Office Furniture at Cost 1.16


Accounts Payable Control 2.1 Date Particulars Folio Debit Credit Balance


Capital 3.1


Trial Balance of Dad and Dave’s As at 10 June 200X

Account No

Account Name

Debit

Credit



GENERAL JOURNAL ENTRIES

for Adjustments

ACCOUNTS PAYABLE

1 Account Service Fee on Overdue Account Memo: Our creditors will charge us interest on any overdue accounts. For example, our creditor, Riley Mills has advised us they will charge 2% pa on our unpaid account. We adjust the ledger accounts by creating a general journal entry. Calculation: We owe $20,000 from August. 20,000 X 2% ÷ 12 = $33.33 + 10% GST = $36.66 General Ledger Accounts (a double entry): Account Service Fee is an expense (increase) and therefore a DEBIT. Accounts Payable is a liability (increase) and therefore a CREDIT. Accounts Payable Ledger (a single entry): Credit Riley Mills account to show we owe an additional $36.66 GENERAL JOURNAL DATE PARTICULARS

(Account Name) FOLIO (Acc No)

DEBIT CREDIT

Sep 30 Late Fees Paid 6.26 33.33

GST Paid 2.11 3.33

Accounts Payable – Riley Mills

2.1 AP1

36.66

(Account Service fee charged on overdue account for one month $20,000 X 2% ÷ 12)

2 Correction of Errors On rare occasions an error is made in posting! For example, a purchase of $1000 from BJ Lewis (invoice #1002) may have been incorrectly posted to J Lewis & Co from the Purchases Journal. This error has to be corrected by creating a General Journal entry. GENERAL JOURNAL GJ2 DATE PARTICULARS


DEBIT CREDIT

Sep 30 Accounts Payable – J Lewis & Co AP3 1000.00

Accounts Payable – BJ Lewis AP2 1000.00

(Correction of posting error – reversing invoice #1002 from BJ Lewis and transferring to JB Lewis & Co)

The initial posting from the Purchases Journal to J Lewis & Co would have been a credit entry. By debiting this account we have reversed the incorrect entry.

Don’t forget to indent Credits

Don’t forget narration



ACCOUNTS RECEIVABLE 3 Charge Account Service Fee on Overdue Account Your business may charge an Account Service Fee on customer’s accounts which are overdue. For example: Our customer, W Ross, has an overdue account and we are charging interest @5%pa. We adjust the ledger accounts by creating a general journal entry. Calculation: W Ross owes $10,000 from August. 10,000 X 5% ÷ 12 = $41.67 + 10% GST = $45.83 General Ledger Accounts (a double entry): Accounts Receivable is an asset (increase) and therefore a DEBIT. Interest Received is income (increase) and therefore a CREDIT. Accounts Receivable Ledger (a single entry): Debit W Ross’ account to show they owe an additional $45.83 GENERAL JOURNAL DATE PARTICULARS


DEBIT CREDIT

Sep 30 Accounts Receivable – W Ross

1-3 AR1 45.83

Late Fees Collected 4.4 41.67

GST Collected 2.10 4.16

(Account Service fee charged on overdue account for one month $10,000 X 5% ÷ 12)

4 Write Off Bad Debt Memo: We have been informed that one of our debtors has been declared bankrupt. In this case we would write the account off as a bad debt. For example: J Sparks owes us $1100.00. Calculation of GST: Total amount owed includes GST. GST = 1100 ÷ 11 GST = 100

General Ledger Accounts (a double entry): Bad Debts Account is an expense (increase) and therefore a DEBIT. GST Collected must be reversed and is therefore a DEBIT. Accounts Receivable liability (decrease) and is therefore a CREDIT. Accounts Receivable Ledger (a single entry): Credit J Sparks account to show their balance is now Nil.



GENERAL JOURNAL DATE PARTICULARS


DEBIT CREDIT

Sep 30 Bad Debts Expense 6-5 1000.00

GST Collected 2-10 100.00

Accounts Receivable – J Sparks

1-3 AR5

1100.00

(Debtor bankrupt – debt written off)

5 Provision for Doubtful Debts Many businesses provide for customers whose debts cannot be collected. No external adjustments, for taxation purposes, occur until a bad debt is written off. GENERAL JOURNAL

DATE PARTICULARS (Account Name)

FOLIO (Acc No)

DEBIT CREDIT

Sep 30 Doubtful Debts 500.00

Less Prov’n Doubtful Debts 1.17 500.00

Provision for Doubtful Debts

Depreciation Fixed assets are depreciated by creating a General Journal entry each month. Depreciation is calculated on an annual basis and divided by 12 in order to show the true position of the company each month. Motor Vehicles valued at $15 000 are to be depreciated at the rate of 15% per annum.

DATE PARTICULARS (Account Name)

FOLIO (Acc No)

DEBIT CREDIT

Sep 30 Depreciation Expense 6.20 187.50

MV Accum Depreciation 1.14A 187.50

September’s Depreciation Expense $15 ,000 x 15% ÷ 12

Total Debits equals (=) Total Credits

Don’t forget to indent your credit entries



The General Journal would look like this:

GENERAL JOURNAL GJ2 DATE PARTICULARS


DEBIT CREDIT

Sep 30 Late Fees Paid 6.1 33.33

Accounts Payable – Riley Mills

2-1 AP1

33.33

(A/c service fee charged on overdue account for one month $20,000 X 2% ÷ 12)

Sep 30 Accounts Payable – J Lewis & Co AP3 1000.00

Accounts Payable – BJ Lewis AP2 1000.00 (Correction of posting error – reversing

invoice #1002 from BJ Lewis and transferring to JB Lewis & Co)

Sep 30 Accounts Receivable – W Ross

1-3 AR1 41.67

Late Fees Collected 4.4 41.67

(IA/c Service fee charged on overdue

account for one month $10,000 X 5% ÷ 12)

Sep 30 Bad Debts Expense 6.5 1000.00

GST Collected 2-10 100.00 Accounts Receivable –Sparks 1-3

AR5

1100.00

(Debtor bankrupt – debt written off)

Sep 30 Doubtful Debts 500.00 Less Prov’n Doubtful Debts 500.00

Provision for Doubtful Debts Sep 30 Depreciation Expense 6.20 187.50

MV Accum Depreciation 1.14A 187.50

(September’s Depreciation Expense)

Sep 30 Wages and Salaries 6.17 1254.50

Other Employer Expenses 6.27 138.00

Accrued Expense 2.7 1392.50

Wages Accrued but not yet paid

Sep 30 Insurance 6.9 600.00

Advertising Prepayments

6.4

1.6

120.00

720.00 September’s Prepaid Insurance and Advert



Activity 4

Analyse the following transactions using a transaction analysis chart for the business Toys Galore. The proprietor (owner) is W Smith:

Jan 1 W Smith invested $10 000 cash in the business (nil GST)

2 The business purchased a motor vehicle priced at $5500 for cash including $500 GST.

3 A cash register priced at $4400 including $400 GST was purchased on credit from Ace Shop Fitters.

4 The business borrowed $5500 from ABC Bank (nil GST).

5 The business purchased land and buildings priced at $55000 including $5000 GST, to be used as shop and office. A cash deposit of $5000 cash was paid to cover the GST component and a mortgage loan obtained for the remaining $50000.

6 W Smith gave to the business his personal computer valued at $2000 (nil GST).

7 W Smith withdrew from the business $100 cash to pay for a gift (nil GST).

8 Cash of $5000 was taken by W Smith from his personal account and deposited into the business bank account (nil GST).

9 The business purchased trading stock priced at $4 400, including $400 GST, for cash.

10 Wages and salaries of $286 were paid to employees (nil GST).

Date of transaction

Accounts being

affected

What Category


Is it an increase

or a decrease

to the account

What is the

amount affecting

the account

$

Will it be a Debit or a Credit entry to the account DR $

CR $

Jan 1 Bank A Inc 10 000 10 000

Capital P Inc 10 000 10 000

2 MV at Cost A Inc 5 000 5 000

GST Paid L Dec 500 500

Bank A Dec 5 500 5 500

3



General Journal of Toys Galore GJ 1


Jan 1





Premises 1.11 Date Particulars Folio Debit Credit Balance



Motor Vehicles 1.14 Date Particulars Folio Debit Credit Balance

Office Equipment 1.15 Date Particulars Folio Debit Credit Balance


Sundry Creditor Ace Shop Fitters 2.6 Date Particulars Folio Debit Credit Balance

GST Paid 2.11 Date Particulars Folio Debit Credit Balance

Mortgage 2.15 Date Particulars Folio Debit Credit Balance





Drawings 3.2 Date Particulars Folio Debit Credit Balance

Wages and Salaries 6.17 Date Particulars Folio Debit Credit Balance

TRIAL BALANCE of Toys Galore

Acc No Acc Name Debit Credit

1.1 Bank

1.11 Premises

1.14 Motor Vehicles

1.15 Office Equipment

1.4 Inventory

2.11 GST Paid

2.15 Mortgage

2.16 Bank Loans

2.6 Sundry Creditor – Ace

3.1 Capital

3.2 Drawings

6.17 Wages and Salaries

TOTAL 76 900 76 900



Activity 4.1

Complete the following transactions for the business called Norman’s Trading Shop Pty Ltd.

June 1 The owner contributed $20,000 into the business bank account.

2 The business purchased a motor vehicle priced at $3,850, including GST of $350, for cash.

3 Purchased trading stock priced at $1,100, including $100 GST, for cash.

4 Paid the electricity account of $220, including $20 GST.

5 Purchased stock priced at $220, including $20 GST, for Cash.

Date of transaction

Accounts being

affected

What Category is the account

(PEARL)

Is it an increase

or a decrease

to the account

What is the

amount affecting

the account

$


account DR $

CR $



General Journal of Norman’s Trading Shop P/L GJ 1




GENERAL LEDGER of Norman’s Trading Bank 1.1 Date Particulars Folio Debit Credit Balance

Jun


Jun


Jun


Jun


Jun 1

Electricity 6.7 Date Particulars Folio Debit Credit Balance



Trial Balance of Normans Trading Shop

As at 30 June 200X

Account No

Account Name

Debit

Credit

1.1

1.14

1.4

2.11

3.1

6.7

TOTAL



Activity 4.2

Complete the following transactions for the business called Bill Barton’s Coffee Shop.

July 1 Proprietor Barton contributed cash of $10,000 to the business.

2 Cash purchase of trading stock priced at $3,300, including $300 GST.

Proprietor Barton withdrew cash $50 to pay for a pair of shoes.

3 Credit purchases of stock $2,200, including $200 GST, for Cash.

Paid wages of $1100 to employees.

6 Purchased office equipment priced at $2,530, including $230 GST on credit from Wilson’s.

General Journal of Bill Barton GJ 1





GENERAL LEDGER – BARTON

Bank 1.1 Date Particulars Folio Debit Credit Balance

Jul


Jul

Office Equipment at Cost 1.15 Date Particulars Folio Debit Credit Balance

Jul


Jul





Jul


Jul

Trial Balance of Barton’s

as at 31 July 200X

Account No

Account Name

Debit

Credit

1.1

1.4

1.15

2.11

3.1

3.2

6.17

TOTAL



Activity 4.3

Daggy Duggan’s Supplies Pty Ltd commenced business on Aug 1.

• Record the Opening Entry

• Record the General Journal transactions

• Post the General Journal to the General Ledger

• Extract a Trial Balance

Aug 1 At commencement the opening balances of a new business are:

- Cash $91 000

- Motor Vehicle valued at $10,000

- Sundry Creditor – Lockhart $500

- Inventory $5 000

- Capital (Calculate)

2 Purchased land and office building priced at $77 000, including $7 000 GST. A cash deposit of $50 000 was paid with a mortgage established for the remainder.

3 Cash purchase of stock $1 320, including $120 GST.

7 Paid $220, including $20 GST, for office expenses.

10 Purchased carpet for the office priced at $1 650, including $150 GST, on credit from Carpet Co.

31 Sundry Creditor Lockhart advises that they are charging an Account Service Fee of 5% per annum for one month on our balance.

Daggy Duggan’s has decided to create a Provision for Doubtful Debts of $400.00

D Duggan (Owner) took Inventory valued at $550.00 incl GST for his personal use.

General Journal of Daggy Duggan’s GJ 1


Aug 1



GENERAL LEDGER – Daggy Duggan’s


Aug


Aug

Less Prov’n for Doubtful Debts 1.7 Date Particulars Folio Debit Credit Balance

Aug


Aug

Furniture and Fittings 1.15 Date Particulars Folio Debit Credit Balance

Aug


Aug

Sundry Creditor Lockhart 2.6 Date Particulars Folio Debit Credit Balance

Aug

Sundry Creditor Carpet Co 2.6A Date Particulars Folio Debit Credit Balance

Aug



GST Collected 2.10 Date Particulars Folio Debit Credit Balance

Aug


Aug


Aug 2


Aug


Aug

Office Expenses 6.14 Date Particulars Folio Debit Credit Balance

Aug

Late Fees Paid 6.26 Date Particulars Folio Debit Credit Balance

Aug

Doubtful Debts 6.28 Date Particulars Folio Debit Credit Balance

Aug



Trial Balance of Daggy Duggan’s As at 31 August 200X

Account

No Account

Name

Debit

Credit 1.1 Bank

1.4 Inventory

1.7 Less Prov’n Doubtful Debts

1.11 Premises

1.14 Motor Vehicles

1.15 Furniture and Fittings

2.6 Sundry Creditor Lockhart

2.6A Sundry Creditor Carpet Co

2.10 GST Collected

2.11 GST Paid

2.16 Bank Loans

3.1 Capital

3.2 Drawings

6.14 Office Expenses

6.26 Late Fees Paid

6.28 Doubtful Debts

TOTAL



Exercise 1

As bookkeeper for Middle Park Distributors you are required to perform the following

tasks:

Middle Park commenced business on 1 March with the following Assets and Liabilities: Cash at Bank $5,000; Stock on hand $25,000 ; Prepayments $1,000; Premises $40,000; Fixtures & Fittings $4,400; Motor Vehicles $15,400; Office Equipment $3,000; Accounts Receivable Control $3624.50 (P Gibson & Sons $649.00; J Cunningham Ltd $990.00; D Smith Ltd $330.00; J Sarowski Pty Ltd $555.50; J Brown Ltd $1100.00); Mortgage on Premises $15000; Accounts Payable Control $2,506.90 (M Finch & Co $726.00; L McDonough Ltd $889.90; K Nelson Pty Ltd $891.00); GST Collected $329.50; GST Outlaid (Paid) $227.90. (Calculate Capital.) Tasks:

1 Prepare the General Journal opening entry for May.

2 Prepare General Journal entries to record miscellaneous transactions to adjust/correct entries.

3 Post ALL journals (use the trade and cash journals from Process Accounts Payable

and Receivable unit) to the General Ledger and extract a trial balance as at 31 March. Miscellaneous Transactions

On 27 March sold an old fridge/freezer for $1100 (GST inclusive) on credit to Like-Nu Shop Fittings Pty Ltd (TIN AB321).

On 30 March, Dale Carss purchased a lap-top computer on credit from Tri Computing for $4235, GST inclusive (TIN B1011).

On 30 March, Dale Carss, the owner, took goods at cost price $770 for personal use.

On 31 March, depreciate motor vehicles at the rate of 20% per annum for one month.

On 31 March, transfer $100 from Prepayments to Advertising



GENERAL JOURNAL OF: Middle Park Folio GJ1

DATE PARTICULARS FOLIO DEBIT CREDIT




Posting Special Journals to the General Ledger

You are familiar with the General Journal, now it is time to post all other journals. These are posted at the end of the month. As with the General Journal the opposite account is entered in the particulars column of the Ledger, eg when posting to the Purchases Account - enter Accounts Payable and in the Accounts Payable account – enter Purchases. There are examples on the next page for your reference. Do not post these figures; post from your own journals.


HIT Newcastle V2.2008 34 of 56 GJ and GL Exercises

PURCHASES JOURNAL OF Folio P1

Date 200X

Tax Inv

Particulars-Acc Payable Foiol Purchases Freight & Ins Paid

GST Outlaid (Paid)

Acc Payable Control

(Creditors)

31/5 TOTAL 3439 61 105 00 354 48 3899 09

Dr 6.1 Dr Dr Cr

Debit the Purchases Account, - Freight Paid, GST Paid - Increase expense Credit the Accounts Payable (Creditor) –Increase Liability - (Equal Dr and Cr)

PURCHASES RETURNS AND ALLOWANCES JOURNAL OF Folio PR1

Date 200X

Adj Note

Particulars-Acc Pay Folio Purchases

Returns Freight & Ins

Paid GST (Paid)

Acc Pay Control

(Creditors)

31/5 TOTAL 462 50 5 00 46 76 514 26

Cr 6.2 Cr Cr Dr

Cr Purchases Returns, Freight/Ins Paid, GST Paid – Decrease expense Dr Accounts Payable – Decreasing balance

SALES JOURNAL OF Folio S1

Date 200X

Tax Invoice

Particulars-Accounts Receivable

Folio Sales GST

Collected

Accounts Receivable Control

(Debtors)

31/5 TOTAL 4194 00 419 40 4613 40

Cr 4.1 Cr Dr Credit Sales – Increase Income, GST Collected – Increase Liability Dr Accounts Receivable (Debtor) – Increase Asset (Equal Dr and Cr) SALES RETURNS AND ALLOWANCES JOURNAL OF Folio SR1

Date 200X

Adjust Note

Particulars-Accounts Receivable

Folio Sales

Returns GST

Collected

Accounts Receivable Control

(Debtors)

31/5 TOTAL 450 00 45 00 495 00

Dr 4.2 Dr Cr Dr Sales Returns – decreasing Income, GST Collected Cr Accounts Receivable – Decreasing balance



EXTRACT CASH PAYMENTS JOURNAL OF Folio CP 1

Date 200X

CH No

Account Debited Folio Debits Credits

Accounts Payable

Purchases Other

Accounts GST Outlaid Cash at Bank

Discount Received

GST Outlaid

MAY 02 1299 Petty Cash (Imprest) 1.2 200 00 200 00

04 1300 Electricity 6.7 500 00 50 00 550 00

31 TOTAL 2584 20 840 00 6145 90 590 00 10524 35 32 50 3 25

Dr Dr Dr each Dr Cr 1.1 Cr Cr Account

EXTRACT CASH RECEIPTS JOURNAL OF Folio CR 1

Date 200X

Rec No

Account Credited Folio Debits Credits

Cash at Bank Discount Allowed

GST Collected

Accounts Receivable

Sales Other

Accounts GST

Collected

MAY 04 1140 A Argent Ltd 1149 50 55 00 5 50 1210 00

1146 Capital 3.1 10463 10 10000 00

31 BS Interest on Account 4.4 19 20 19 20

31 TOTAL 17981 55 146 50 14 65 3718 00 3045 00 10094 20 385 50

Dr 1.1 Dr Dr Cr Cr Cr each Cr Account Post the Cash Payments and Cash Receipts Journals, according to the Debit, Credit at the top of the columns to the Account

Names in the headings.

All amounts in the Other Accounts column must be posted individually to the account shown in the Account Debited/Credited column and the account number entered in the Folio column of the Journal. Remember to write the Dr or Cr and Acc No at the bottom of the column.


HIT Newcastle V2.2008 36 of 56 GL and GJ Exercises

GENERAL LEDGER – Middle Park


Petty Cash 1.2 Date Particulars Folio Debit Credit Balance

Accounts Receivable 1.3 Date Particulars Folio Debit Credit Balance


Sundry Debtor 1.5 Date Particulars Folio Debit Credit Balance

Prepayments 1.6 Date Particulars Folio Debit Credit Balance




Furniture and Fixtures at Cost 1.13 Date Particulars Folio Debit Credit Balance


Accumulated Depreciation MV 1.14A Date Particulars Folio Debit Credit Balance



Sundry Creditor 2.6 Date Particulars Folio Debit Credit Balance








Sales 4.1 Date Particulars Folio Debit Credit Balance



Sales Returns and Allowances 4.2 Date Particulars Folio Debit Credit Balance

Discount Received 4.3 Date Particulars Folio Debit Credit Balance

Interest Received 4.4 Date Particulars Folio Debit Credit Balance

Dividends 4.8 Date Particulars Folio Debit Credit Balance

Purchases 6.1 Date Particulars Folio Debit Credit Balance

Purchases Returns and Allowances 6.2 Date Particulars Folio Debit Credit Balance

Discount Allowed 6.3 Date Particulars Folio Debit Credit Balance

Advertising 6.4 Date Particulars Folio Debit Credit Balance

Bank Charges 6.6 Date Particulars Folio Debit Credit Balance

Electricity 6.7 Date Particulars Folio Debit Credit Balance



Postage 6.11 Date Particulars Folio Debit Credit Balance

Rent Expense 6.12 Date Particulars Folio Debit Credit Balance

Office Supplies 6.14 Date Particulars Folio Debit Credit Balance


Freight and Insurance Paid 6.18 Date Particulars Folio Debit Credit Balance

Depreciation Expense 6.20 Date Particulars Folio Debit Credit Balance

Gas 6.25 Date Particulars Folio Debit Credit Balance

Late Fees Paid 6.26 Date Particulars Folio Debit Credit Balance



Trial Balance of Middle Park As at 31 March 200X

Account No

Account Name

Debit

Credit

1.1 Bank

1.2 Petty Cash Imprest

1.3 Accounts Receivable

1.4 Inventory

1.5 Sundry Debtor

1.6 Prepayments

1.11 Premises

1.13 Furniture and Fixtures

1.14 Motor Vehicles at Cost

1.14A Accum Depreciation on MV

1.15 Office Equipment at Cost

2.1 Accounts Payable Control

2.6 Sundry Creditor

2.10 GST Collected

2.11 GST Paid

2.15 Mortgage

3.1 Capital

3.2 Drawings

4.1 Sales

4.2 Sales Returns and Allowances

4.3 Discount Received

4.4 Interest Income

4.8 Dividends

4.9

6.1 Purchases

6.2 Purchases Returns and Allowances

6.3 Discount Allowed

6.4 Advertising

6.6 Bank Charges

6.7 Electricity

6.11 Postage

6.12 Rent Expense

6.14 Office Supplies

6.17 Wages and Salaries

6.18 Freight and Insurance Paid

6.20 Depreciation Expense

6.25 Gas

TOTAL



Argent Hardware Supplies

1 Argent Hardware Supplies commenced business on 1 May with the following opening balances:

Cash at Bank $9,510; Stock on hand $12,000; Prepayments $9,600 Premises $110,000; Office Furniture $4,650; Motor Vehicles $18,800; Office Equipment $8,000; Accounts Receivable Control $9,801.00 (James Brown Ltd $880; Michael Bevan Ltd $891; Jackson Industries $330; John Bauer Ltd $660; Frank Sinatra Ltd $7040); Mortgage on Premises $50,000; Accounts Payable Control $2,186.95 (Spencer Ltd $880; Nelson Eddy Pty Ltd $550; Dales Carss Ltd $360; Geoffrey Barrett Ltd $396.95); GST Collected $198.81; GST Outlaid (Paid) $391. (Calculate Capital.)

2 Tasks: � Prepare the General Journal opening entry for 1 May.

� From the information below, prepare General Journal entries to record the transactions.

� Post ALL journals (use the trade and cash journals from Process Accounts

Payable and Receivable unit) to the General Ledger and extract a trial balance as

at 31 May.

• 1 May – Depreciate Office Furniture, Office Equipment and Motor

Vehicles at the rate of 12.5% for one month. Calculate to the nearest dollar.

• 5 May - Purchase of an Asset on Credit: A motor Vehicle was

purchased on Credit from Argenton Motors for $33,000 incl GST • 7 May - Sale of an Asset on Credit: Old office furniture was sold on

credit to Like ‘Nu for $1650 incl GST • 15 May - Owner invested an additional $10,000 in the business

• 16 May - Obtained an loan from That Bank for $20,000

• 21 May - Purchased a large safe on credit from Tubb’s Safes for $8,800 incl GST

• 23 May - Sold an old Motor Vehicle for $11,000 cash incl GST



• 31 May - Prepayments: Transfer $1000 from prepayments to Insurance and $200 to Advertising

• 31 May - Accrued Expenses: Record accrued wages of $2600 and

Other Employer Expenses of $312

• 31 May – Provision for Doubtful Debts for $500.00

GENERAL JOURNAL OF: Argent Hardware Supplies Folio GJ1 DATE PARTICULARS FOLIO DEBIT CREDIT



GENERAL LEDGER – Argent


Petty Cash 1.2 Date Particulars Folio Debit Credit Balance

Accounts Receivable 1.3 Date Particulars Folio Debit Credit Balance


Sundry Debtor 1.5 Date Particulars Folio Debit Credit Balance

Prepayments 1.6 Date Particulars Folio Debit Credit Balance

Less Prov’n Doubtful Debts 1.7 Date Particulars Folio Debit Credit Balance




May

Furniture & Fixtures at Cost 1.13 Date Particulars Folio Debit Credit Balance

May

Furniture and Fixtures Accumulated Depreciation 1.13A Date Particulars Folio Debit Credit Balance

May


May

MV Accumulated Depreciation 1.14A Date Particulars Folio Debit Credit Balance


May

Office Equipment Accumulated Depreciation 1.15A Date Particulars Folio Debit Credit Balance


Sundry Creditor 2.6 Date Particulars Folio Debit Credit Balance

May cr



Accrued Expenses 2.7 Date Particulars Folio Debit Credit Balance

May


May


May


May


May


May


May



Sales 4.1 Date Particulars Folio Debit Credit Balance

May

Sales Returns and Allowances Date Particulars Folio Debit Credit Balance

May

Discount Received Date Particulars Folio Debit Credit Balance

May

Interest Received 4.4 Date Particulars Folio Debit Credit Balance

May

Dividends 4.8 Date Particulars Folio Debit Credit Balance

May 31

Purchases 6.1 Date Particulars Folio Debit Credit Balance

May

Purchases Returns and Allowances Date Particulars Folio Debit Credit Balance

Advertising 6.4 Date Particulars Folio Debit Credit Balance

May

Bad Debts 6.5 Date Particulars Folio Debit Credit Balance

May

Discount Allowed Date Particulars Folio Debit Credit Balance

May



Insurance 6.9 Date Particulars Folio Debit Credit Balance

May 31

Interest Expense 6.10 Date Particulars Folio Debit Credit Balance

May


Freight and Insurance Paid 6.18 Date Particulars Folio Debit Credit Balance

May

Bank Fees Date Particulars Folio Debit Credit Balance

May


Other Employer Expenses 6.27 Date Particulars Folio Debit Credit Balance

May




Trial Balance of Argent Hardware Supplies As at 31 May

Account No

Account Name

Debit

Credit

1.1 Bank 1.2 P/Cash 1.3 A/c Receivable 1.4 Inventory 1.5 Sundry Debtor Like Nu 1.6 Prepayments 1.7 Less Prov’n for Doubtful Debts

1.11 Premises 1.13 Furniture and Fixtures at Cost

1.13A F&F Accumulated Depreciation 1.14 MV at Cost

1.14A MV Accumulated Depreciation 1.15 Equip at Cost

1.15A Equip Accumulated Depreciation 2.1 A/c Payable 2.6 Sundry Creditor Argenton Motors 2.9 Accrued Expenses

2.10 GST Collected 2.11 GST Paid 2.15 Mortgage 2.16 Bank Loans 3.1 Capital 4.1 Sales 4.2 S/Returns 4.8 Dividends 6.1 Purchases 6.2 P/Returns 6.4 Advertising 6.6 Bank Charges 6.7 Electricity 6.9 Insurance

6.13 Repairs and Maintenance 6.14 Stationery/Office Supplies 6.15 Telephone 6.17 Wages 6.18 Freight and Ins Paid 6.20 Depreciation 6.27 Other Employer Expenses 6.28 Doubtful Debts

TOTAL 305,558.90 305,558.90



MEDOWLEA NEWSAGENCY Margaret Smith (proprietor) purchases MEDOWLEA NEWSAGENCY (18A Main Road Medowlea, NSW 2318; ABN 21 354 444 673) and commences a new set of books on 1 September with the following assets and liabilities: Cash at Bank $8,000.00 Motor Vehicles 12,100.00 Premises 18,700.00 Stock 22,000.00 Furniture and Fittings 1,540.00 Office Equipment 2,530.00 D Gray—Sundry Debtor 770.00 Accounts Receivable 1,507.00

K Batt $440.00 M Pont Dancing School 517.00 D Kerkin 220.00 G Jones 330.00

Accounts Payable 671.00 P Fleck $33.00 T Booth 132.00 A Lee 154.00 D Queen 242.00 M Carter 110.00

Regis Motors—Sundry Creditor 2200.00 GST Collected 137.00 GST Outlaid (Paid) 61.00 (Remember to calculate CAPITAL) Tasks: Prepare the General Journal opening entry as at 1 September. Prepare General Journal entries to record general transactions. Post ALL journals to the General Ledger and extract a trial balance as at 30 September General Journal transactions for September:

SEP 02 Bought a motor vehicle (book value $4000.00) on credit from Regis Motors, $4,400.00 (GST inclusive).

08 Medowlea acquires a Bank Loan of $10,000 from That Bank.

25 Sold Furniture and Fittings on credit to D Gray, $1100.00 (GST inclusive)— Invoice 872.

30 Motor Vehicles are depreciated at 17.5% per annum. Record September’s depreciation.

Record accrued Wages of $1500 and Other Employer Expenses $180

Mary Williams has decided to set up a Provision for Doubtful Debts of $200.



GENERAL JOURNAL OF MEDOWLEA NEWSAGENCY GJ1



GENERAL JOURNAL OF MEDOWLEA NEWSAGENCY GJ2



GENERAL LEDGER OF MEDOWLEA NEWSAGENCY


Accs Receivable 1.3 Date Particulars Folio Debit Credit Balance


Sundry Debtor Gray 1.5 Date Particulars Folio Debit Credit Balance

Less Prov’n Doubtful Debts 1.7 Date Particulars Folio Debit Credit Balance


Furniture and Fixtures at Cost 1.13 Date Particulars Folio Debit Credit Balance


Motor Vehicles Accumulated Depreciation 1.14A Date Particulars Folio Debit Credit Balance




Accounts Payable 2.1 Date Particulars Folio Debit Credit Balance

Sundry Creditor Regis 2.6 Date Particulars Folio Debit Credit Balance

Accrued Expenses 2.7 Date Particulars Folio Debit Credit Balance

GST collected 2.10 Date Particulars Folio Debit Credit Balance



Bank 10000 10000 cr


Sundries 64200 64200 cr

Wages 6.17 Date Particulars Folio Debit Credit Balance




Other Employer Expenses 6.27 Date Particulars Folio Debit Credit Balance


Trial Balance of Medowlea Newsagency

As at 30 September 20XX NO ACCOUNT NAME DEBIT CREDIT 1.1 1.3 1.4 1.5 1.7 1.11 1.13 1.14

1.14A 1.15 2.1 2.6 2.7 2.10 2.11 2.16 3.1 6.17 6.20 6.27 6.28

TOTAL

bsbfia304a maintain a general ledgermaintain+a... · revenue ledger account is recorded as a debit...

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