Question

QUESTION 5 (6 marks) Hill Riders is a local bicycle shop retailing and servicing mountain bikes....

QUESTION 5

Hill Riders is a local bicycle shop retailing and servicing mountain bikes. The following information pertains to the business for the month of August 2020.

  • On August 1st, Hill Riders purchased additional equipment for $15,400 (GST-inclusive). The equipment was delivered on August 1st and the business paid 30% of that amount on the same day. Hill Riders paid the remaining amount on August 20th.
  • Hill Riders started using equipment purchased on August 1st from the day of purchase. The management believes the equipment will last for five years. By the end of August, no depreciation on that equipment had been recorded for the month.
  • Hill Riders received $16,500 (GST-inclusive) on July 29th for bike servicing to be provided in August 2020. By the end of August 2020, all services had been provided.
  • At the end of July 2020, Hill Riders recorded gross wages of $12,000 of which $3,300 was a PAYG withholding. The rest was payable to employees. On August 5th, Hill Riders paid the outstanding amount to employees from the July transaction.

Required:

Record the economic impact of the above events in the month of August 2020 in the General Journal below. GST needs to be accounted for. Narrations are not required.

Date

Account titles (Details)

Dr ($)

Cr ($)

Homework Answers

Answer #1

In the Above question I assume GST @12%.

Following entries will come in the month of August.

Date Account titles (Details) Dr ($) Cr ($)
1st aug purchase a/c 13750
GST Inpput 1650
Vendor a/c 15400
1st aug Vendor a/c 4620
cash a/c 4620
5th Aug Salaries A/c 8700
Cash A/c 8700
20th aug Vendor a/c 10780
cash a/c 10780
31st aug Customer 16500
Service a/c 14732
GST payble 1768

on 1st aug There was a Purcahse and 30% payment done.

on 5th Salaries of July paid to employees after deducting PAYG

on 20th aug Balance payment for vendor against purchase was made.

on 31st aug invoice raised against service completed for which adavance received in July-20.    

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