Solution-Prepare journal entries to record the transactions

Prepare journal entries to record the transactions

Assignment Help Financial Accounting

Reference no: EM13834954

Johnson owns Piano Tuning Service. The Trial Balance at 30^th June 2013 is shown below:

Account

Account no.

Debit

Credit

Cash at Bank 1100 $ 6 560

Accounts Receivable 1200 7 760

Prepaid Insurance 1300 380

Supplies 1400 420

Motor Vehicle 1500 48 800

Accumulated Depreciation-Motor Vehicle 1510 $16 050

Accounts Payable 20008 880

Interest Payable 2100 880

Salary payable 2150 1000

Bank Loan 2200 14 000

Johnson, Capital 3000 23 110

------------------------ $63,920 $63,920

Transactions completed during the year ended 30 June 2014 are summarised below:

Tuning Fees of $57,000 were receivable during the year; $47,900 of this total was received in cash. The reminder consisted of transactions of credit.
Revenue from Piano repairs was $48 700. Cash received totalled $33,500, and accounts receivable increased by $15,200.
Supplies costing $750 were purchased during the year on credit.
On 1 January 2014, John paid $6000 off the bank loan plus interest of $1800. The interest payment consisted of $880 accrued up to 1 July 2013 and a further $920 which accrued for the period to 31 December 2013.
Petrol and oil for the vehicle cost $5,300 in cash.
Insurance on the vehicle, paid in advance, was $1,680.
Telephone expense of $4,480 was paid.
Accounts receivable of $27 800 were collected, and $4,000 was paid on accounts payable.
Johnson withdrew $5,000 cash from the business.
On 1^st January 2014 Johnson invested $20,000 for expanding his business.
Salary for the manager $ 5,000 has been paid.
On 1^st January Johnson borrowed additional fund of $ 10,000
Machinery was purchased on 1^st January 2014 of $ 15,000. The useful life of the machinery was 5 years.

The following information relating to adjusting entries is available at the end of June, 2014:

A physical count showed supplies costing $400 on hand at 30 June, 2014.
Accrued interest on the bank loan is $420.
Insurance costing $1,500 expired during the year.
Depreciation on the vehicle is $10 700.
The June telephone account for $380 has not been paid or recorded.
Salary for the manager accrued but not paid $2,000
Repair expenses accrued but not paid $ 2,000.
Depreciate machinery using straight line method.

Open T accounts for the accounts listed in the trial balance and the accounts below:

Account Account Number

Telephone Expense Payable 2300

Johnson, Drawings 3100

Piano Tuning Fees Revenue 3200

Piano Repair Fees Revenue 4100

Petrol & Oil Expense 5000

Telephone Expense 5100

Supplies Expense 5200

Insurance Expense 5300

Depreciation Expense-Vehicle 5400

Interest expense 5500

Salary expense 6000

Repair expenses 7000

Machinery 8000

Accumulated depreciation- Machinery 8500

Required:

A. Prepare journal entries to record the transactions (1-13) completed in the year to 30 June, 2014

Post the entries to Accounts
Prepare and post the adjusting entries
Prepare a 10-column worksheet for the year ended 30^th June, 2014
Prepare an Income Statement, a statement of changes in Owners' Equity and a balance-

sheet for the year ended 30^th June, 2014

Prepare the closing entries

Comment on the performance of the business based on their financial statements (600 words).

Reference no: EM13834954

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Prepare journal entries to record the transactions

Reference no: EM13834954

Reference no: EM13834954

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