Question

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 1^st, Hill Riders purchased additional equipment for $15,400 (GST-inclusive). The equipment was delivered on August 1^st and the business paid 30% of that amount on the same day. Hill Riders paid the remaining amount on August 20^th.
• Hill Riders started using equipment purchased on August 1^st 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 29^th 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 5^th, 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 ($)	Cr ($)

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.