Reference no: EM13500496

Account Name	Debit	Credit
Cash	46,000
Accounts receivable	87,500
Provision for doubtful debts		3,200
Inventory control	251,280
Prepaid insurance	8,250
Computer equipment	85,000
Accumulated depreciation - Computer equipment		32,000
Shop furniture & fittings	110,000
Accumulated depreciation - Shop furniture & fittings		58,000
Goodwill	80,000
Accounts payable		65,500
GST paid	17,970
GST collected		31,400
Sales commission payable		4,800
Salaries and wages payable		7,600
Interest payable		1,860
Taxes payable - PAYG withholding		13,214
Dividend payable		33,000
Loan - non-current		280,000
Paid up capital		100,000
Retained earnings		55,246
	686,000	686,000

 

Adjusting Entries:

1.        Accrued wages at the end of March amounted to $4,800 for ShopA1 and $3,600 for ShopA2.

2.        Superannuation on Wages and Salaries incurred during the month of March (including the accruals at month end - see adjusting entry 1 above) will need to be accrued at the rate of 9% of Gross Wages.

3.        Computer Equipment is depreciated at 25% per annum, reducing balance method, (50% to ShopA1 and 50% to ShopA2)

4.        Shop Fixtures and Fittings are depreciated at 15% per annum straight line method, (50% to ShopA1 and 50% to ShopA2)

5.        Prepaid insurance as at 28^th February amount to $8,250 represented the premium paid on an annual policy starting on 1^st December, 2010. Insurances are split 50/50 between ShopA1 and ShopA2 and calculated on a daily basis. (365 day year)

6.        Sales commission earned by retail assistants, but not paid as at 31^st March amounted to $5,830 (40% ShopA1, 60% ShopA2)

7.        The company's short term and long term loans are charged interest at 8% pa. Interest is calculated on a daily basis and is split 50/50 between the 2 stores.

8.        Accrued electricity as at 31^st March for ShopA1 is $385 and ShopA2 is $407.

9.        At the end of the month, after the depreciation charge was made, the company sold some surplus to requirement Shop Furniture that had a written down value of $15,600 at the time of sale, for $12,300 cash. The shop furniture had originally cost the company $29,600. Gains and Losses on non-current assets are split equally between the two shops.

10.     Due to the credit crisis, the company has decided to adjust its provision for doubtful debts to equal 10% of the Accounts Receivable balance owing as at 31^st March.

11.     The management decided to create a provision for Annual Leave to recognise this liability on a progressive basis. The amount to be charged to this provision is $4,200 split equally between the two shops.

Required:

You are required to do the journal entries for the above 11 where the figures are obtained from the table above (the opening balances) and the information in the description of each adjusting entry to be completed. The general ledger accounts to be used in the Adjusting Journal Entries are to be those used in the table above. Each journal entry must be numbered accordingly to the number allocated in the "Adjusting Entries".