Project on Accounting System Information

Team Project Cover Sheet
FAMILY NAME FIRST
NAME
(PRINT CLEARLY)
......................................................
.......................
.....................................................
......................
.
.....................................................
.....................
STUDENT ID. NUMBER
..........................................................
........
.
..........................................................
.......
..........................................................
........
UNIT NAME UNIT CODE DUE DATE
TUTORIAL OR L EC T UR E DAY & TIME
(if applicable)
TEAM
NUMBER
(if
applicable)
NAME OF TUTOR (if applicable)
TITLE/TOPIC OF PROJECT WORD
COUNT NAME OF LECTURER
Late projects submitted outside office hours will be receipted at 8.30
a.m. the following working day.

SALZBRUCK MUSICAL INSTRUMENTS
PTY LTD
–
ACCOUNTING PRACTICE SET

Table of Contents
INTRODUCTION................................................................................................................................................................6
Company Background................................................................................................................................................6
Accounting System Information.................................................................................................................................6
UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS...............................................................................7
As at 31 May 2018...........................................................................................................................................7
SUBSIDIARY LEDGERS...................................................................................................................................................8
Schedule of Accounts Receivable..............................................................................................................................8
As at 31 May 2018...........................................................................................................................................8
Schedule of Accounts Payable...................................................................................................................................8
As at 31 May 2018...........................................................................................................................................8
TRANSACTIONS................................................................................................................................................................9
For June 2018.............................................................................................................................................................9
Instructions...............................................................................................................................................................10
ADJUSTING ENTRIES.....................................................................................................................................................11
General Journal.................................................................................................................12
Cash Receipts Journal...............................................................................................................................................15
Cash Payments Journal.............................................................................................................................................16
Sales Journal.............................................................................................................................................................18
Purchases Journal.....................................................................................................................................................19
LEDGERS..........................................................................................................................................................................20
Accounts Receivable Subsidiary Ledger..................................................................................................................20
Accounts Payable Subsidiary Ledger.......................................................................................................................21
General Ledger.........................................................................................................................................................22
WORKSHEET....................................................................................................................................................................31
FINANCIAL STATEMENTS............................................................................................................................................33
Schedules of Subsidiary Ledgers..............................................................................................................................33
Income Statement.....................................................................................................................................................34
Statement of Changes in Equity...............................................................................................................................36
Balance Sheet...........................................................................................................................................................37
Post-closing Trial Balance........................................................................................................................................38
WRITTEN COMPONENT................................................................................................................................................39
STUDENT DECLARATION FOR COMPLETION OF WORK......................................................................................43

INTRODUCTION
The objective of this Accounting practice set is to provide students with an insight into the process of
recording transactions, completing adjusting and closing entries, and preparing financial statements for a
retail business.
Company Background
Salzbruck Musical Instruments Pty Ltd has been in business in Sydney since July, 2012. The company was
started by William Jacques and operates a shop which sells musical instruments on a wholesale basis to other
businesses on credit and cash terms. The company's share capital consists of 1,134,000 ordinary shares, issued at
$1 each, that are owned by various members of the Jacques family. The company employs a combination of
both sales and administration staff to operate the business.
Accounting System Information & Procedures
The company has a financial year end of 30 June and prepares adjusting entries at the end of the financial year.
To ensure efficiency of its accounting procedures, the company uses the following Special Journals to maintain
its accounting records:
1. Sales Journal (SJ): to record all sales of inventory on credit
2. Purchases Journal (PJ): to record all purchases of inventory on credit
3. Cash Receipts Journal (CRJ): to record all cash receipts
4. Cash Payments Journal (CPJ): to record all cash payments
5. General Journal (GJ): to record all transactions other than the above.
Business transactions are recorded for Salzbruck Musical Instruments on a daily basis in one of these five
journals in the accounts.
Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers
are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted
immediately to the relevant ledger account if they are entered into the general journal, the “other” column of the
Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts
Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the
end of the month and then posted to the appropriate accounts. The company uses a periodic inventory system.
In practice, the company would be required to collect and pay Goods and Services Tax (GST) on its sales and
purchases. However, for the purposes of this exercise, GST has been excluded.
Please Note: All amounts in this practice set should be rounded to the nearest dollar.

UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS
As at 31 May 2018
Acc. No. Account Debit ($) Credit ($)
100 Cash at Bank 614,628
101 Accounts Receivable Control 238,140
102 Store Supplies 151,011
103 Inventory 781,200
104 Prepaid Store Rent (paid 1 March 2018) 739,620
105 Prepaid Insurance (paid 1 Nov. 2017) 11,340
150 Showroom Fittings 510,300
151 Accumulated Depreciation-Showroom Fittings
160 Equipment 173,250
161 Accumulated Depreciation - Equipment 85,050
200 Accounts Payable Control 153,594
201 Interest Payable
202 Utilities Payable
203 Wages Payable
204 Salaries Payable
205 Tax Payable
206 Dividend Payable
250 Mortgage Loan (due 31 July 2042) 606,942
300 Share Capital 1,134,000
301 Retained Profits (1 July 2017) 963,522
302 Dividends Declared
303 Profit and Loss Summary
400 Sales Revenue 4,045,734
401 Sales Discounts (Discount Allowed) 31,059
402 Sales Returns and Allowances 8,757
500 Purchases 1,926,855
501 Purchase Discounts (Discount Received) 24,192
502 Purchase Returns and Allowances 10,143
600 Freight-Out 2,898
601 Wages Expense - Sales Staff 968,121
602 Depreciation Expense - Showroom Fittings
603 Depreciation Expense - Equipment
604 Supplies Expense
605 Rent Expense
606 Insurance Expense
607 Advertising Expense 43,848
608 Interest Expense
609 Utilities expense 58,464
610 Tax Expense
611 Sundry Expenses 3,024
612 Salaries Expense – Office Staff 760,662
613 Bad Debts Expense
7,023,177 7,023,177

SUBSIDIARY LEDGERS
Schedule of Accounts Receivable
As at 31 May 2018
Note: Salzbruck Musical Instruments offers all customers Credit Terms 2/10, n/30, unless otherwise stated
Acc. No. Account Invoice
date
Amount ($)
101-1 Amadeus Cellos 27 May 95,256
101-2 Bach Guitars 16 May 48,132
101-3 Chopin Pianos 23 April 65,142
101-4 Ludwig Trumpets 11 May 29,610
$238,140
Schedule of Accounts Payable
As at 31 May 2018
Acc. No. Account Invoice
date
Credit terms Amount ($)
200-1 Schubert Synthesisers 29 May 2/10, n/60 43,470
200-2 Wagner Violins 22 May 1/10, n/45 110,124
$153,594

TRANSACTIONS
For June 2018
Date Transaction Week 1
June 1 Amadeus Cellos paid the entire balance of its account that was still outstanding.
Delivered goods to Bach Guitars for $68,292 and issued invoice #910. Issued cheque #153 to pay
$7,560 for delivery costs of inventory to their premises.
June 3 Paid the amount owing to Schubert Synthesisers. Cheque #154 was sent.
June 4 Total Cash Sales for the week were $19,278.
Week 2
June 8 Chopin Pianos Store paid $27,342 toward the amount it owes us.
June 9 Made a purchase from Wagner Violins for $58,590 for boutique lighting: Terms are 1/10, n/45 and
date of invoice was 8 June.
The firm issued cheque #155 for the purchase of store supplies amounting to $5,544.
June 10 Amadeus Cellos purchased inventory of $68,796. Invoice #911 was issued.
June 11 Some of the boutique light fittings purchased on 7 June from Wagner Violins were the wrong
design. Returned inventory in exchange for a Credit Note of $18,900.
June 12 Total Cash Sales for the week were $26,334.
Week 3
June 15 Purchased inventory from Schubert Synthesisers for $96,390. The invoice was dated 14 June.
Credit terms are 2/10, n/30.
June 16 Sold inventory to Chopin Pianos for $124,362 on invoice #912. Issued cheque #156 to pay for
delivery costs of $9,450.
June 16 Paid office staff salaries of $73,458. Cheque #157 was issued for payment.
Cheque #158 was issued to pay sales staff wages, $62,370.
June 18 The company issued cheque #159 to pay the amount still owing to Wagner Violins.
June 19 Total Cash Sales for the week were $25,011.