Reference no: EM13903982

The following trial balance provides the closing balances of all accounts as at 31 December 2012 which are the opening balances of those accounts as of 1 January 2013.

Hi -Fi Way

Trial Balance

As of 31 December 2012

Account #	Account	YTD Debit ($)	YTD Credit ($)
1-1110	Cheque Account	84,406
1-1180	Undeposited Funds	0
1-1190	Electronic Clearing Account	0
1-1200	Accounts Receivable	38,445
1-1210	Less Provision for Doubtful Debts		769
1-1300	Inventory	136,120
1-1400	Office Supplies	441
1-1500	Prepaid Rent	0
1-3110	Property & Equipment at Cost	54,000
1-3120	Property & Equipment Accum Dep		22,094
2-1200	Accounts Payable		33,726
2-1310	GST Collected		5,116
2-1330	GST Paid	6,806
2-1410	Salaries Payable		0
2-1420	PAYG Withholding Payable		1,860
2-1700	Interest Payable		0
2-1800	Short Term Loans		0
2-2100	Bank Loans		48,000
3-1100	Share Capital		40,000
3-8000	Retained Earnings		190,257
3-9000	Current Year Earnings		0
3-9999	Historical Balancing		0
4-1100	Sales Revenue		102,314
5-1100	Cost of Sales/Cost of Goods Sold	71,620
6-1100	Depreciation Expense	22,094
6-1800	Office Supplies Expense	2,861
6-1930	Salaries Expense	17,812
6-2100	Rent Expense	0
6-2200	Telephone Expense	3,924
6-2420	Electricity Expense	3,990
6-2500	Bank Charges	33
6-2600	Bad Debts Expense	1,104
8-1000	Interest Income		0
9-1000	Interest Expense	480
	TOTAL	444,136	444,136

Goods and services tax (GST): The company is a registered entity for GST purposes and accounts for GST on an accrual basis. As a small business, Hi-Fi Way pays GST in quarterly instalments and no GST is due to be remitted in the month of January. The prices of goods and services that are subject to GST are quoted inclusive of 10% GST.

First transaction: On 2 January 2013, Hermione issued Cheque no. 4007 to Office Supplies Warehouse for the purchase of $2,200 (includes 10% GST) worth of equipment.

Early January 2013

Date      Transaction description

2              Issued Cheque No. 4008 for $1,540 (includes 10% GST) to Discount Office Supplies for the cash purchase of office supplies.

2              Obtained a loan of $15,000 from Uncle Claudio (a family relative of Hermione Fowler) at a simple interest rate of 6% per year, Cheque No. 121, ID #CR000001. The principal and interest on the loan are payable in six months time.

3              Issued Cheque No. 4009 for $6,468 to Big Telco in payment of Purchase #341 (Supplier Inv#263).

3              Received Cheque No. 221 from Jerry Technology for $10,648, which is the full amount outstanding on their account, ID #CR000002.

3              Purchased 9 units Swish Phones from Mega Tech at $1,177 each (includes 10% GST), Purchase #344, Supplier Inv#922. Issued Cheque No. 4010 for $5,600 to this supplier for this particular invoice at the time of the purchase.

5              Realised that the entry above for the purchase of 9 Swish Phones was incorrect.  The correct entry should have been: Purchased the following items from JCN Electrical, Purchase #344, Supplier Inv#922:9 units Swish Phones at $1,177 each (includes 10% GST), and 8 units Mieca camera lenses at $1,760 each (includes 10% GST).  Issued Cheque No. 4010 for $5,600 to this supplier for this particular invoice at the time of the purchase.  You will need to reverse the incorrect entry made on 3 January and then make the correct entry.

5              Sold the following items on credit to Hypertronics, Invoice #3532:

2 units MX620 notebook computers for $2,420 each (includes 10% GST) (standard cost $1,470 [no GST])

3 units ZII game consoles for $2,750 each (includes 10% GST) (standard cost $1,670 [no GST]).

$4,400 was received immediately, Cheque No. 642, with the rest due to be received during the last week of the month. Note that MYOB automatically assigns ID #CR000003 to this cash receipt.

7              Record an entry to transfer the amount recorded in the Undeposited Funds account (that is, all cheques received from 1 January to 6 January inclusive) into the Cheque Account, ID #CR000004.

Mid January 2013

Date      Transaction description

8              Purchased 9 units MX620 notebook computers from Big Telco at $1,617 each (includes 10% GST), Purchase #345, Supplier Inv#746.

8              Made a cash sale to Hypertronics, Invoice #3533 for the following items:

5 units MX620 notebook computers for $2,420 each (includes 10% GST) (standard cost $1,470 [no GST])

4 units Mieca camera lenses for $2,640 each (includes 10% GST) (standard cost $1,600 [no GST]).

Received Cheque No. 647 for $22,660 from this customer. Note that MYOB automatically assigns ID #CR000005 to this cash receipt.

14           Received a purchase order from Pikea, Customer PO#3949, Invoice #3534. The following items are required to be shipped by 24 January 2013:

5 units MX620 notebook computers at $2,420 each (includes 10% GST) (standard cost $1,470 [no GST])

5 units Swish Phones at $1,760 each, (includes 10% GST) (standard cost $1,070 [no GST]) .

15           Purchased 10 units ZII game consoles from Big Telco for a list price of $1,837 each (includes 10% GST), Purchase #346, Supplier Inv#668. Issued Cheque No. 4011 for the full payment of this purchase.

15           Issued Cheque No. 4012 for $5,500 (includes 10% GST) to pay Advanced Property Management for three month's worth of rent in advance.

17           Sold merchandise on credit to Jerry Technology, Invoice #3535. The items sold were:

3 units Mieca camera lenses for $2,640 each (includes 10% GST) (standard cost $1,600 [pre GST])

3 units ZII game consoles for $2,750 each (includes 10% GST) (standard cost $1,670 [no GST]).

17           Ordered 9 units Swish Phones for $1,177 each (includes 10% GST), from Mega Tech, Purchase #347, Supplier Inv#SO747.

20           Received 9 units Swish Phones, Purchase #347. These items were ordered from Mega Tech for $1,177 each (includes 10% GST), Supplier Inv#SO747.

21           Record an entry to transfer the amount recorded in the Undeposited Funds (that is, all cheques received from 7 January to 20 January inclusive) account into the Cheque Account, ID #CR000006.

REQUIRED:

1. Open Ledger accounts (T-format or Running-balance format) for the above accounts and enter the balances as per the Trial Balance.
2. Record the transactions listed below in the General Journal, using the accounts listed in the Trial Balance.
3. Post the transactions from the General Journal to the Ledger accounts.
4. Prepare a Trial Balance as at 21 January 2013