Loxley Farms' is owned and operated by Ms. Robyn Hoodling. Robyn opened the business some time ago and has had some training in basic bookkeeping. Robyn has been keeping a pretty good record of her business so far and has even managed to do some of the needed balance day adjustments already. There are a few balance day adjustment items remaining that she was unsure on and so she has enlisted your help and has provided you with her unadjusted trial balance for Jan 2020. Your task is to record the adjusting entries in the "Journal", post these entries to the "Ledger", and finally help fill out the "Income Statement" and "Balance Sheet" based on the "Adjusted Trial Balance". You can assume all other balance day adjustments not listed have already been accounted for.
31/1/2020 The business has 12 sales staff. Each sales staff member is paid a GROSS wage of $836 per week [PAYG withheld of $134]. At the end of the month, the business owed its 2-weeks of wages to the sales team that has yet to be recorded.
31/1/2020 Received $20592 (including GST) from customer at the start of the month for delivery of some service and it was recorded as unearned revenue and GST Collected. The business manages to deliver these on the 31 Jan 2020.
31/1/2020 A bank loan for the amount of $108000 was taken out on the 1 Jan 2020. The bank charges interest of 5% per annum and interest payments are due quarterly.The interest on $108000 is yet to be recorded. The bank loan is due in July 2025.
31/1/2020 On 1 Jan 2020, the business paid $16940 (including GST) for 11-months worth of rent for the office. This was recorded at the time as Prepaid Rent and GST Paid.
31/1/2020 The motor vehicle is depreciated using the straight line method. It has a useful life of 7 years and a zero residual value.
31/1/2020 The business hires 7 general office assistants. Each assistant is paid a NET wage of $924 per week [PAYG withheld of $140]. At the end of the month, the business owed its the office assistants 1-week of wages that has yet to be recorded.
31/1/2020 The office furniture is depreciated using the straight line method. It depreciates at 10% per annum and is assumed to have a zero residual value.
31/1/2020 On 1 Jan 2020, the business paid $13068 (including GST) for 11-months worth of business insurance. This was recorded at the time as Prepaid Insurance and GST Paid.
31/1/2020 On 2 Jan 2020, the business purchased 18 packs of sticky notes worth of $198 (including GST) and recorded the amounts as Office Supplies and GST Paid. Robyn counted these packs of sticky notes on 31 Jan 2020 and found that 13 packs have been consumed in addition to other office supplies that has already been accounted for.
|Unadjusted trial balance "for month ending 31/1/2020"|
|156||Accum Depreciation - Office furniture||20520|
|159||Accum Depreciation - Motor Vehicle||35520|
|244||Consulting Fees Payable||3000|
|501||Cost of goods sold||80089|
|602||Office Supplies Expense||0|
|607||Sales commission expense||18687|
|651||Depreciation expense - motor vehicle||0||0|
|655||Depreciation expense - office furniture||0|
Total: Dr 810,555 CR 810,555
1. Wages A/c Dr. 20064
To Wages Payable A/c 20064
2. Unearned Revenue A/c Dr. 20592
To Service Revenue A/c 20592
3. Rent Expense A/c Dr. 1540
To Prepaid Rent A/c 1540
4. Depreciation expense - Motor Vehicle A/c Dr. 740
To Motor Vehicle A/c 740
5. Depreciation expense - Office furniture A/c Dr. 570
To Office Furniture A/c. 570
6. Wage Expense A/c Dr. 6468
To Wages Payable A/c 6468
7. Insurance expense A/c Dr. 1188
To prepaid insurance A/c 1188
Income And Expenditure:
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