1 A Count Of The Stationery Room Showed That Office Supplies On Hand At 30 Th June 2743713

(1) A count of the stationery room showed that Office Supplies on hand at 30th June 2018 were $2 313.

(2) Both the Furniture & Fittings and the Equipment will be used evenly over their useful lives. The expected total useful lives and residual values of both assets is as follows:

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Estimated Useful life

Estimated Residual

Furniture & Fittings

6 years

$6 500

Equipment

10 years

$1 800

(3) Interest on the loan is 4.5% per year. Interest accrued for the year but not recorded at 30th June 2018 was $2048.

(4) In order to allow for cash flow fluctuations, the bank has approved a $25,000 overdraft facility for Peter’s business bank account.

(5) The balance in the Prepaid Insurance account represents a 12 month insurance policy that commenced on 1st May 2018.

(6) $2 670 of the recorded Sales Revenue is for deposits paid for catering services to be provided in July.

(7) As of 30th June 2017, Peter has estimated that 2% of his Accounts Receivable will not be collected.

REQUIRED:

As it is now the end of the financial year, you have to undertake the following work for Penny:

a. Prepare any necessary Balance Day Adjustment Journals for SCC. Include a brief narration (explanation) for each journal entry. (11 marks)

b. Post the journals from (a) above to the General Ledgers provided. (7 marks)

c. Complete the Adjusted Trial Balance provided for the account balances calculated in the General Ledgers from (b) above. (7 marks)

SALT and CHILLI CATERING

UNADJUSTED TRIAL BALANCE

AS AT 30 June 2018

Debit ($)

Credit ($)

Cash at Bank

15 064

Accounts Receivable

18 949

Inventory

18 760

Prepaid Insurance

6 114

Office Supplies on hand

2 436

Furniture & Fittings

52 370

Accumulated Depreciation – Furniture & Fittings

13 974

Equipment

81 895

Accumulated Depreciation – Equipment

17 880

Accounts Payable

24 391

Electricity Payable

3 110

Loan Payable

53 155

Peter’s SCC – Capital

54 516

Peter’s SCC – Drawings

36 695

Sales Revenue

423 300

Sales Returns and Allowances

9 440

Cost of Sales

163 808

Discount received

12 526

Freight inwards

7 420

Catering Salary Expense

65 936

Delivery Expense

18 992

Advertising Expense

25 773

Rent Expense

26 548

Office Salaries Expense

36 150

Electricity Expense

9 963

Discount Allowed

6 539

Totals

602 852

602 852