Process required reversing entries via the general journal

Assignment Help Financial Management

Reference no: EM13945771

Instructions - July 14 Transactions

1) Process the required reversing entries via the general journal.

2) July's transactions are as follows:

1-Jul	Purchased a second new office workstation from Image Office Solutions for $3,200 on identical terms to the purchase made on 2nd June 2014. That is a $700 deposit was paid (Cheque No: 4046587) and an interest free credit facility was arranged for the remainder. This will be paid in ten instalments of $250 to be automatically deducted from Comfy Chair Bingley bank account on the last business day of each month.
2-Jul	Cash Sale Ms B Zhou $1,190. Cash sales receipt No: CR1375.
2-Jul	Sold inventory on credit to Bill Brown $7,340. Our invoice number 004143. Credit terms 2/10, n/28.
3-Jul	Petty cash (voucher No: 0324) used to purchase plants for the office, cost $78. Recorded as a sundry expense.
4-Jul	Paid Moto Service Station $135. Fuel & Oil for the delivery vehicle. Cheque No: 4046588.
4-Jul	Paid two weeks wages to J. Preston (Cheque No: 4046589) & A. Fry (Cheque No: 4046590).
7-Jul	Received a cheque for $8,240 from Green Hotel Group being full settlement of our invoice No: 004141.
7-Jul	Paid Aaron Industries $2,015 being part of our outstanding account balance (invoice No: 646971). Cheque No: 4046591.
7-Jul	Purchased inventory on credit from Burnham & Associates for $5,650. Their invoice No: 7401. Credit terms 2%/10, n/30.
8-Jul	Sold inventory on credit to PMG Pty Ltd $8,465. Our invoice No: 004144. Credit terms 2/10, n/28.
9-Jul	Cash Sale Mr S. Copland $490. Cash sales receipt No: CR1376.
9-Jul	Bill Brown returned inventory with a sale price of $495 our invoice No: 004143. The item had been ordered in error. Mike decides to accept the returned items and issue credit note No: CN0027.
10-Jul	Received a cheque from Bill Brown $6,708 being settlement of our invoice No: 004143.
11-Jul	Paid the City of Bowbank $180 being the local council rates & taxes for the month of July 2014. Cheque No: 4046592.
11-Jul	Sold inventory on credit to Green Hotel Group $5,175. Our invoice No: 004145. Credit terms 2/10, n/28.
14-Jul	Paid June's telephone account, $215. Cheque No: 4046593 payable to Star Telecommunications Ltd.
14-Jul	Cash Sale Mrs J. Koenig $1,459. Cash sales receipt No: CR1377.
15-Jul	Received a cheque for $23,026 from PMG Pty Ltd representing settlement of their account (our invoice No: 004144 + the outstanding balance from June 14).
16-Jul	Purchased inventory on credit from King Chairs Pty Ltd $4,400 + $60 delivery fee. Their invoice No: 10268. Credit terms 3/5, 2/10, n/30.
16-Jul	Paid Thorne Pty Ltd $2,893 with cheque No: 4046594 in settlement of their invoice No: 21087.
17-Jul	Petty cash (voucher No: 0325) used to purchase postage stamps $30. Recorded as office supplies.
18-Jul	Received a cheque from Sussex Pty Ltd for $2,620 being part settlement of their outstanding account, our invoice No: 004137.
18-Jul	Paid two weeks wages to J. Preston (Cheque No: 4046595) &
22-Jul	Returned inventory which had cost $195 on July 7th to Burnham & Associates. Upon inspection the item was found to be damaged. Burnham & Associates issued a credit note (No: 3267). A. Fry (Cheque No: 4046596).
21-Jul	Sold inventory on credit to Bill Brown $12,690 Our invoice No: 004146. Credit terms 2/10, n/28.
22-Jul	Purchased inventory on credit from Thorne Pty Ltd $3,750. Their invoice No: 21118. Credit terms 2/14, n/30.
23-Jul	Issued cheque No: 4046597 for $7,331 to King Chairs Pty Ltd in settlement of our outstanding June account balance and their invoice No: 10268.
23-Jul	Sold inventory on credit to Sussex Pty Ltd. $6,860 our invoice No: 004147. Discount terms 2/10, n/28.
24-Jul	Cash sale to Mr D. Franks $495. Cash sales receipt No: CR1378.
24-Jul	Paid Moto Service Station $152. Fuel & oil for the delivery vehicle. Cheque No: 4046598.
25-Jul	Issued cheque No: 4046599 for $340 to Harry the Handyman for repairs carried out at the business premises.
25-Jul	Sold inventory on credit to Channing Trading $5,970. Our invoice No: 004148. Discount terms 2/10, n/28.
28-Jul	Petty cash (voucher No: 0326) used to pay M. Halifax's $42 taxi fare (to attend a business meeting).
28-Jul	Issued cheque No: 4046600 for $3,675 to Thorne Pty Ltd as settlement of their invoice No: 21118.
28-Jul	Purchased inventory on credit from King Chairs Pty Ltd $2,100 + $60 delivery fee. Their invoice No: 10284. Credit terms 3/5, 2/10, n/30.
29-Jul	Sold inventory on credit to Sussex Pty Ltd. $6,350. Our invoice No: 004149. Discount terms 2/10, n/28.
30-Jul	Petty cash (voucher No: 0327) used to purchase a framed print for the office wall, cost $90. Recorded as a sundry expense.
31-Jul	Mike Halifax issues a cash cheque (No: 4046601) for $7,000 being his monthly personal drawings.
31-Jul	Issued a cash cheque $240 petty cash reimbursement. Cheque No: 4046602.

Process the July transaction information in the appropriate journals and complete the petty cash book.

A physical count revealed inventory on hand @ 31st July = $29,703.

3) Complete the details of the accounts receivable & accounts payable subsidiary ledgers.

4) Post the journal entries to the appropriate ledger accounts.

5) Prepare a bank reconciliation as at 31st July 2014.

6) Complete a schedule of accounts receivable and accounts payable at 31st July 2014.

7) Prepare an unadjusted trail balance on Comfy Chair's accounting worksheet.

8) Process general journal entries for the following balance day adjustments:

    i) Office supplies on hand @ 31St July 2014 = $102
    ii) All depreciation calculations are performed using the straight line (prime cost) method.
           Delivery Vehicle - Historic cost $30,000. Useful life 8 years.
           Estimated residual value $4,000.
           Office Furniture & Equipment - Historic cost $26,000.
           Useful life 10 years. Estimated residual value $2,000.
           These amounts do not include the workstations purchased on 2nd June & 1st July which are deemed to have a useful life of 5 years with no residual value.
            Buildings - Historic cost $200,000. Useful life 40 years. No residual value (for depreciation purposes).
    iii) The pre-paid insurance account represents a policy purchased on 1st July 2013. The premium paid was $6,480 for a three year policy. Fifty five percent of the premium is for insurance of the delivery van the remaining forty five percent is for building insurance.

iv) Allowance for Doubtful debts to equal 2% of Accounts Receivable balance.

v) Comfy Chair office telephone use for July is $240. This has not yet been recorded.

vi) Staff are paid fortnightly in arrears. John & Angela were last paid on Friday 18th for work done up to and including the 18th. As at 31st July John is owed wages for 9 days work done between Monday 21st and Thursday 31st inclusive. Angela did five days' work during this period. Remember that John's fortnightly salary represents ten working days & Angela's six working days (per fortnight).

9) Transfer the adjusting journal entries to and complete the accounting worksheet.

10) Post the adjusting entries to the ledger accounts.

11) Record closing entries in the general journal and post them to the general ledger.

12) Prepare a fully classified Income Statement for the month ended 31st July 2014 and a fully classified Balance Sheet as at 31st July 2014.

Attachment:- assignment.pdf

Reference no: EM13945771

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