Assume you have just been employed as the part-time accountant for‘Celebrations’. The previous part-time accountant resigned at the end of May, 2015. Celebrationsis a small businesswhich provides organisation services and supplies for parties, wedding receptions and other happy occasions. This business is based in Newcastle and is owned and operated by Ms Jenny Smiles. Jennyalso employs a sales consultant (PaulineHappi) and both of you will be paid on a monthly basis. The business uses a perpetual inventory system, noting the cost of all inventory sold is 70% of the sales (GST exclusive) price. Due to the small size of the business Ms Smiles is unable to afford a computerised accounting system thus all accounting is completed manually. Prior to resigning, the previous part-time accountant completed all necessary accounting and produced a trial balance as at 30 April2015. Given it is now the end of May, 2015, Ms Smiles requests you to complete all necessary accounting to enable the preparation of a trial balance as at 31May, 2015. Specifically Ms Smiles requests you to use Excelto: (a) Prepare general journal entries to record the May transactions as identified below. Notations/descriptions are required in the general journal entries. (b) Open general ledger accounts (T-Bar or Running Balance format) for each account shown on the 30 April 2015 trial balance and - enter the opening balance for each account ie the balance as shown in the 30April 2015 Trial Balance. - Post the entries from the general journal to the general ledger accounts and enter the posting references in the general journal. (c) Balance off each general ledger account and prepare a trial balance as at 31 May 2015. NB When a discount is received or allowed, there is no need to adjust the associated GST Paid or Collected. Ms Smileshas provided a list of the transactions which occurred during the month of May, as well as the business’s trial balance as at 30 April, 2015. The transactions for May 2015 were as follows: May. 1 Sold inventory on credit to Wendy’s Parties $2,200 (includes 10% GST). Terms 3/7, n/30. Invoice No 1231. 2 Received $2,750 commission owing from parties organised in April. 3 Paid a cheque (No. 501) $1,870 to Party Supplies for purchase of inventory on credit in April. 5 Paid a cheque (No. 502) $1,430 to Nuptial Supplies for purchase of inventory on credit in in April. 6 Received a cheque (No. 220) from V Strong $1,320 for credit sale of inventory made in April. 7 Received $2,134 owing from Wendy’s Parties for May1 sale. 8 Cash sale of inventory $1100 (includes 10% GST). 8 Paid freight inwards $66 (includes 10% GST) by cheque No 503 9 Paid rent of $770 (includes 10% GST) for April, by cheque (No. 504). 9 Purchased inventory on credit from Weddings R’US $2,750 (includes 10% GST). Terms 2/7, n/30. 10 Obtained a loan of $15,000 from Aunty Phebe. Principal and interest of 5% pa is to be paid by December 31, 2015. Cheque No 25 was immediately deposited into the bank. 11 Issued a $330 (includes 10% GST) credit to Wendy’s Parties for unsuitable inventory returned. 11 Sold inventory on credit to Australiana Entertainers $1,650(includes 10% GST). Terms 2/7, n/30. Invoice No 1232. 12 Purchased inventory on credit from Party Outfits $1,100 (includes 10% GST). Terms 2/7, n/30. 13 Cash sale of inventory $770 (includes 10% GST). 15 Paid $2,695 owing to Weddings R’US for May 9 purchase, by cheque (No. 505). 16 Purchased inventory from Nuptial Supplies $1,210 (includes 10% GST). Paid $700 by cheque (No 506) as part payment. The remainder of the purchase was on credit. 18 Paid electricity $1,980 (includes 10% GST) by cheque (No. 507). 18 Received $1,617 owing from Australiana Entertainers. 20 Sold inventory on credit to Happy Revellers $2,530 (includes 10% GST). Invoice No 1233. 24 Paid office salaries $1,750 (cheque No. 508) and sales salaries $1,900 (cheque No. 509).
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