Financial Accounting

1.    Journalise the following transactions. Narrations are required (10 marks)

Date:	Transaction
May 2	Paid $1,400 for furniture purchased
May 4	Received $1,200 cash from customers on account
May 5	Received $3,400 cash for services performed
May 9	Purchases store equipment on account $3,000
May 12	Purchased supplies on account $1,200
May 14	Paid creditors $4,500 on account
May 28	Paid rent $500
May 29	Paid salary expense $1,100
May 30	Performed services on account for $1,200
May 31	Received $650 from customers for future service

2.    Journalise the adjusting entry needed on 30 June 2012 for each of the following independent cases affecting Salzer Printers. Narrations are required.

(5 marks)

a	Salzer pays employees each Friday. The amount of the weekly payroll is $2,000 for a five-day workweek. The current accounting period ends on Monday.
b	Salzer has borrowed money, signing a bill payable. For the current year, Salzer accrued interest expense of $600 that it will pay next year.
c	The beginning balance of Supplies was $2,600. During the year, Salzer purchased supplies for $6,100, and at 31 December the supplies on hand total $2,100.
d	Salzer is providing graphic service for a large customer from Melbourne. The customer paid Salzer $12, 000 as the annual service fee and Salzer recorded this amount as Unearned Service Revenue. The owner determines that Salzer has earned one-fourth the total fee during the current year.
e	Depreciation for the current year includes Equipment: $3,850 and Furniture, $1,300. Make a compound entry.

3.    Selly Melly Ltd uses a perpetual inventory system. The following transactions

       occurred during the last half of 2011. [Ignore GST].

   July 1     Beginning inventory    6 units @ $25 per unit     Total  $150

    Aug       Purchased                   6 units @ $30 per unit     Total $180

    Sept       Sold                             8 units

    Oct        Purchased                  10 units @ $35 per unit     Total $350

    Nov       Sold                             7 units

     Dec       Sold                             3 units   

 Required :

Calculate the value for cost of goods sold for the last half of 2010 and ending inventory on the 31 December 2011 if Selly Melly Ltd uses

i) FIFO approach to inventory valuation.      (4 marks)

ii) LIFO approach to inventory valuation.     (4 marks)

iii) Average approach to inventory valuation. (Nearest two decimals)       (4 marks)

 4. The following data have been gathered for Alpha Controls to assist you in preparing the 31 July 2011 bank reconciliation:

 a)   The 31 July bank balance was $4,000.

b)   The bank statement included $30 of service charges.

c)   There was an EFT deposit of $900 on the bank statement for the monthly rent due from

      a tenant.

d)   Cheques #541 and #543 for $205 and $320, respectively, were outstanding cheques          shown on the statement.

e)   The 31 July deposit of $4,435 did not appear on the bank statement.

f)    The book keeper had erroneously recorded a $500 cheque as $5,000. The cheque was written to a vendor to pay off an account payable.

g)   Included on the bank statement was a cheque written by Alpha's Comforts for $200

      which was deducted from Alpha Controls' account.

h)  The bank statement included a dishonoured cheque written by MMI for a $460

      Payment on account.

i)    The cash at bank account showed a balance of $3,200 on 31 July.

Required:

 Prepare the 31 July 2011, bank reconciliation for Alpha Controls and Adjustment to Cash at Bank Schedule. (13 Marks)

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