Reference no: EM132968616

Problem 1: Prepare and submit a Profit and Loss statement for August 2021

1. August 1 To get your business underway you contributed $285,000 cash
2. into the business. August 2 You purchased 3,036 bottles of Pinot Noir wines from Blacktown Winery on credit.
3. August 3 You paid $1,980 rent expense (incl. GST) for August 2021.
4. August 4 You purchased 836 bottles of Chardonnay wines from Hall Wines on credit. You promised to pay your liability on 5 September 2021.
5. August 5 You sold 440 bottles of Pinot Noir wines to C. Tamarama on credit, terms 2/15, n/30.
6. August 6 You granted credit to C. Tamarama for 5 bottles of Pinot Noir wines returned. August 6 You purchased office supplies for cash from G. Epping for $11,440 incl. GST. August 8 You purchased 1380 bottles of Sauvignon Blanc wines from Voss Vineyard, paid by cash on the same date.
7. August 10 You sold 440 bottles of Chardonnay wines to Oakville Hotel on credit, terms 2/15, n/30.
8. August 11 You granted credit to Oakville Hotel for 6 bottles of Chardonnay wines returned. August 12 You purchased 1,012 bottles of Fume Blanc wines from Glenwood Estate on credit.
9. August 13 You returned 10 bottles of Fume Blanc wines to Glenwood Estate and received credit.
10. August 14 You paid Blacktown winery for the purchase of inventories made on 2nd August. August 15 You received payment in full from C. Tamarama, less discount.
11. August 18 You received payment in full from Oakville Hotel, less discount.
12. August 21 You sold 495 bottles of Sauvignon Blanc wines to Slater Ltd on credit. Slater Ltd August 22 You paid Glenwood Estate in full.
13. August 23 You sold 70 bottles of Fume Blanc wines to Berrilee Partners on credit. Berrilee Partners promised to pay the full amounts on 25 August.
14. August 28 After several attempts to collect receivables from Berrilee Partners you finally write off Berrilee Partners accounts as bad. You follow the allowance method to write off the bad debts.
15. August 31 Office supplies on hand at 31 August is $6,446 incl. GST.
16. August 31 Estimates of doubtful debts is 10% of Accounts Receivable as at 31 August. You record the adjusting entry for the allowance for doubtful debts account at 31 August.