Detailed Analysis of Journal Entries, Ledgers, and Financial Reporting

This assignment provides a comprehensive overview of fundamental accounting principles through the analysis of various journals, ledgers, and financial statements. It includes detailed journal entries, such as those for sales returns, dividends, bad debts, and depreciation, along with entries for closing the books. The solution presents the Cash Receipts Journal, Cash Payments Journal, Sales Journal, and Purchases Journal, demonstrating the flow of financial transactions. Subsidiary ledgers for Accounts Receivable and Accounts Payable are provided to track individual customer and vendor transactions. Furthermore, the General Ledger is meticulously presented, showing the balances and movements of various accounts, including assets, liabilities, equity, revenue, and expenses. The assignment culminates in the closing entries and the transfer of profit to retained earnings, illustrating the accounting cycle from start to finish. This assignment serves as a valuable resource for students studying financial accounting.

General Journal
Date Account Post Ref. Debit Credit
Jun 11 Wagner Violins 200/200-2 18
,900
Purchase Returns and Allowances 502 18,900
(Defective material returned)
Jun 22 Sales Returns and Allowances 402 23
,562
Chopin Pianos 101/101-3 23,562
(Defective material returned)
Jun 29 Dividends Declared 302 177
,100
Dividend Payable 206 177,100
(Dividend payable)
Jun 30 Bad Debts Expense 613 29
,610
Ludwig Trumpets 101/101-4 29,610
(Ludwig become insolvent)
Jun 30 Supplies Expense 604 71
,190
Store Supplies 102 71,190
(Supplies consumed during the period)
Jun 30 Rent Expense 605 246
,537
Prepaid Store Rent 104 246,537
(Rent for the period)
Jun 30 Insurance Expense 606 7,
560
Prepaid Insurance 105 7,560
(Insurance for the period)
Jun 30 Depreciation Expense - Showroom Fittings 602 56
,700
Accumulated Depreciation-Showroom Fittings 151 56,700
(Depreciation for the period charged)
Jun 30 Depreciation Expense – Equipment 603 17
,010
Accumulated Depreciation - Equipment 161 17,010
(Depreciation for the period charged)
Jun 30 Interest Expense 608 38
,945
Interest Payable 201 38,945

(Interest payable on loan)
Jun 30 Utilities expense 609 6,
426
Utilities Payable 202 6,426
(Telephone expenses payable)
Jun 30 Wages Expense - Sales Staff 601 8,
910
Wages Payable 203 8,910
(Wages payable to sales staff)
Jun 30 Salaries Expense – Office Staff 612 36
,729
Salaries Payable 204 36,729
(Salaries payable to office staff)
Jun 30 Tax Expense 610 86
,400
Tax Payable 205 86,400
(Tax payable for the period)
Jun 30 Profit and Loss Summary 303 5,693
,141
Inventory 103 781,200
Sales Discounts (Discount Allowed) 401 33,075
Sales Returns and Allowances 402 32,319
Purchases 500 2,175,705
Freight-Out 600 19,908
Wages Expense - Sales Staff 601 1,101,771
Depreciation Expense - Showroom Fittings 602 56,700
Depreciation Expense - Equipment 603 17,010
Supplies Expense 604 71,190
Rent Expense 605 246,537
Insurance Expense 606 7,560
Advertising Expense 607 43,848
Interest Expense 608 38,945
Utilities expense 609 64,890
Tax Expense 610 86,400
Sundry Expenses 611 15,624
Salaries Expense – Office Staff 612 870,849
Bad Debts Expense 613 29,610
(Closing entry)
Jun 30 Sales Revenue 400 4,440
,555
Purchase Discounts (Discount Received) 501 26
,446
Purchase Returns and Allowances 502 29
,043
Inventory 103 1,416
,492
Profit and Loss Summary 303 5,912,536
(Closing entry)
Jun 30 Profit and Loss Summary 303 219

,395
Retained Profits 301 219,395
(Profit transferred to retained profits)
Cash Receipts Journal
Date Account Post
Ref.
Cash at
Bank
(100)
Sales
Discounts
(401)
Sales
(400)
Accounts
Receivable
(101)
Other
DR DR CR CR CR
Jun 1 Amadeus Cellos 101-1 95,256
9
5,256
Jun 4 Sales Revenue 400 19,278 19,278
Jun 8 Chopin Pianos 101-3 65,142
6
5,142
Jun 12 Sales Revenue 400 26,334 26,334
Jun 19 Sales Revenue 400 25,011 25,011
Jun 25 Chopin Pianos 101-3 98,784 2,016
1
00,800
Jun 26 Sales Revenue 400 39,312 39,312
Jun 28 Bach Guitars 101-2 116,424
1
16,424
Jun 30 Share Capital 300 126,000
126,00
0
Jun 30 Sales Revenue 400 23,436 23,436
Total 634,977 2,016 133,371
3
77,622
126,00
0
Cash Payments Journal
Date Account Chq. Post Other Accounts Purchase Cash at Purchase

No. Ref.
Payable
(200) s (550) Bank (100) Discounts
(501)
DR DR DR CR CR
Jun 1 Freight-Out 153 600 7,
560
7,
560
Jun 3 Schubert
Synthesisers 154 200-1 43,
470
43,
470
Jun 9 Store Supplies 155 102 5,
544
5,
544
Jun 16 Freight-Out 156 600 9,
450
9,
450
Jun 16 Salaries Expense -
Office Staff 157 612 73,
458
73,
458
Jun 16 Wages Expense -
Sales Staff 158 601 62,
370
62,
370
Jun 18 Wagner Violins 159 200-2 149,
814
148
,316 1,498
Jun 23 Sundry Expenses 160 611 12,
600
12,
600
Jun 29 Wagner Violins 161 200-2 75,
600
74,
844 756
Jun 29 Wages Expense -
Sales Staff 162 601 62,
370
62,
370
Total 233,
352
268
,884 - 499
,982 2,254
Sales Journal
Date Invoice No. Account Post Ref. Amount
Ju
n 1 910 Bach Guitars 101-2 68,292
Ju
n 10 911 Amadeus Cellos 101-1 68,796
Ju
n 16 912 Chopin Pianos 101-3 124,362
Total 261,450
Purchases Journal

Date Invoice Date Account Terms Post Ref. Amount
Ju
n 9 08-Jun-18 Wagner Violins 1/10, n/45 200-2 58,590
Ju
n 15 14-Jun-18 Schubert Synthesisers 2/10, n/30 200-1 96,390
Ju
n 24 22-Jun-18 Wagner Violins 1/10, n/45 200-2 93,870
Total 248,850
Accounts Receivable Subsidiary Ledger
Amadeus Cellos 101-1
Date Explanation Post Ref. Debit Credit Balance
May 3
1 Balance 95,256 DR
Jun 1 Repayment CRJ 95,256 0
Jun 1
0 Credit sale SJ 68,796 68,796 DR
Bach Guitars 101-2
Date Explanation Post Ref. Debit Credit Balance
May 3
1 Balance 48,132 DR
Jun 1 Credit sale SJ 68,292 116,424 DR
Jun 2
8 Repayment CRJ 116,42
4 0
Chopin Pianos 101-3

Date Explanation Post Ref. Debit Credit Balance
May 3
1 Balance 65,142 DR
Jun 8 Repayment CRJ 65,142 0
Jun 1
6 Credit sale SJ 124,362 124,362 DR
Jun 2
2 Material returned GJ 23,562 100,800 DR
Jun 2
5 Repayment CRJ 100,80
0 0
Ludwig Trumpets 101-4
Date Explanation Post Ref. Debit Credit Balance
May 3
1 Balance 29,610 DR
Jun 3
0 Bad Debts due to insolvency GJ 29,610 0
Accounts Payable Subsidiary Ledger
Schubert Synthesisers 200-1
Date Explanation Invoice
Date
Post
Ref. Debit Credit Balance
Ma
y 31 Balance 43,470 CR
Jun 3 Repayment CPJ 43,470 0
Jun 15 Credit purchase 14-Jun-18 PJ 96,390 96,390 CR

Wagner Violins 200-2
Date Explanation Invoice
Date
Post
Ref. Debit Credit Balance
Ma
y 31 Balance 110,124 CR
Jun 9 Credit purchase 08-Jun-18 PJ 58,590 168,714 CR
Jun 11 Defective material
returned GJ 18,900 149,814 CR
Jun 18 Repayment CPJ 149,81
4 0
Jun 24 Credit purchase 22-Jun-18 PJ 93,870 93,870 CR
Jun 29 Repayment CPJ 75,600 18,270 CR
General Ledger
Cash at Bank 100
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 614,628 DR
Jun 30 Total from cash receipts journal CRJ 634,977 1,249,60
5 DR
Jun 30 Total from cash payments journal CPJ 499,982 749,623 DR
Accounts Receivable Control 101
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 238,140 DR
Jun 22 Sales return from Chopin Pianos GJ 23,562 214,578 DR
Jun 30 Total from sales journal SJ 261,450 476,028 DR
Jun 30 Total from cash receipts journal CRJ 377,622 98,406 DR

Jun 30 Bad Debts due to insolvency GJ 29,610 68,796 DR
Store Supplies 102
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 151,011 DR
Jun 9 Supplies purchased CPJ 5,544 156,555 DR
Jun 30 Supplies consumed GJ 71,190 85,365 DR
Inventory 103
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 781,200 DR
Jun 30 Closing entry (opening inventory) GJ 781,200 0
Jun 30 Closing entry (closing inventory) GJ 1,416,492 1,416,49
2 DR
Prepaid Store Rent 104
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 739,620 DR
Jun 30 Rent expired GJ 246,537 493,083 DR

Prepaid Insurance 105
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 11,340 DR
Jun 30 Insurance expired GJ 7,560 3,780 DR
Showroom Fittings 150
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 510,300 DR
Accumulated Depreciation-Showroom Fittings 151
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Depreciation for the period GJ 56,700 56,700 CR

Equipment 160
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 173,250 DR
Accumulated Depreciation - Equipment 161
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 85,050 CR
Jun 30 Depreciation for the period GJ 17,010 102,060 CR
Accounts Payable Control 200
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 153,594 CR
Jun 11 Return of defective material GJ 18,900 134,694 CR
Jun 30 Total from purchases journal PJ 248,850 383,544 CR
Jun 30 Total from cash payments journal CPJ 268,884 114,660 CR

Interest Payable 201
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Interest payable on loan GJ 38,945 38,945 CR
Utilities Payable 202
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Telephone expenses payable GJ 6,426 6,426 CR
Jun 30
Wages Payable 203
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Wages payable for one day GJ 8,910 8,910 CR

Salaries Payable 204
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Salaries payable for 15 days GJ 36,729 36,729 CR
Tax Payable 205
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Taxes payable for the period GJ 86,400 86,400 CR
Dividend Payable 206
Date Explanation Post
Ref. Debit Credit Balance
May 31 Balance 0
Jun 30 Dividend declared GJ 177,100 177,100 CR