Accounting Practice Set: Salzbruck Musical Instruments - June 2018

This accounting practice set simulates the financial activities of Salzbruck Musical Instruments Pty Ltd for the month of June 2018. The assignment requires students to record transactions in various journals (Sales, Purchases, Cash Receipts, Cash Payments, and General Journals), post to subsidiary and general ledgers, prepare an unadjusted trial balance, and complete adjusting entries. Students are then tasked with preparing a worksheet, financial statements (Income Statement, Statement of Changes in Equity, and Balance Sheet), subsidiary ledger schedules, closing entries, and a post-closing trial balance. The exercise covers a range of accounting concepts, including inventory systems, depreciation, and the preparation of key financial reports, offering a comprehensive understanding of the accounting cycle.

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

2

SALZBRUCK MUSICAL INSTRUMENTS
PTY LTD
–
ACCOUNTING PRACTICE SET

Leo Langa, 2018
Accounting & Finance
UWA Business School
The University of Western Australia
Crawley WA 6009

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.

Week 4
June 22 Chopin Pianos returned $23,562 of inventory purchased on 14 June. Issued a Credit Note for the
transaction.
June 23 Issued cheque #160 for $12,600 to pay for the annual gift the company donates to the Smith
Family Charity Fund. The gift is to be recorded as a sundry expense in the accounts.
June 24 Purchased inventory from Wagner Violins, worth $93,870. The terms were 1/10, n/45. Date of the
invoice was 22 June.
June 25 Received the total amount owing from Chopin Pianos.
June 26 Total Cash Sales for the week were $39,312.
Week 5
June 28 Bach Guitars paid the entire balance of its still outstanding account.
June 29 Reduced $75,600 of the amount owing to Wagner Violins and Cheque #161 was issued.
June 29 A dividend of $177,100 was declared to the company shareholders. However, the dividend will
not be paid until September 30, 2018.
Paid sales staff wages, $62,370 and Cheque #162 was issued to meet the payment.
June 30 Issued additional shares to the owners of the Company for cash, and $126,000 was received and
banked.
Total Cash Sales for the week were $23,436.
INSTRUCTIONS
1) Enter the transactions on pages 8-9 into the appropriate Journal for the month of June 2018, Remember to post
Journal transactions to the ledger accounts as specified in the “Account System Information” section of the
introduction.
2) Total all Special Journal columns and post to the appropriate ledger account at the end of the month.
3) Prepare the unadjusted Trial Balance as at 30 June on the worksheet provided.
4) Prepare the adjusting entries shown on page10 in the General Journal and post to the relevant ledger accounts.
The enter the adjustments in the relevant worksheet columns and prepare an adjusted Trial Balance.
5) A stocktake on 30 June 2018 indicates that the balance of closing inventory is $1,416,492. Use this information to
complete the remaining columns of the worksheet.
6) Use the worksheet to prepare the Income Statement and Balance Sheet.
7) Complete the Schedule of Accounts Receivable and Schedule of Accounts Payable. Ensure the balances agree
with the totals in the control accounts.
8) Prepare closing entries and post to the relevant general ledger accounts.

9) Complete the post-closing Trial Balance as at June 2018.
ADJUSTING ENTRIES
a) The Showroom Fittings were installed on 1 July, 2017. They have a useful life of 9 years and no salvage value.
b) The Equipment was installed on 1 July, 2012. They have a useful life of 10 years and estimated salvage value of $3150.
c) Twelve months of store rent was prepaid on 1 March, 2018. Of the original prepaid amount, $246,537 worth of store
rent has now expired.
d) A count of store supplies indicates that $85,365 remain on hand at year end.
e) A one-year insurance policy was purchased on 1 November 2017 for $11,340.
f) Interest on the ANZ Bank Loan is charged at 7% per annum and is paid annually on 1 August (the interest expense
should be rounded off to the nearest dollar). The ANZ Bank Loan was originally taken out on the 1 August, 2017.
g) The company has been informed that Ludwig Trumpets has been declared bankrupt and Salzbruck Musical
Instruments Pty Ltd has agreed to write off the amount owing as a bad debt. The company uses the direct write-of
method to account for any bad debts in the books.
h) A telephone bill for $6,426 for June was received on 4 July, 2018. The amount has not yet been recorded. The company
records them as a utilities expense.
i) Office Staff are paid once per month, $73,458. The Office Staff were last paid on the 15 June, 2018. Exactly half of
one month Office Staff wages are still owing.
j) Sales Staff are paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June, 2018. One day
of the wages bill is still owed to the Sales Staff.
k) The estimated Tax Payable for the year ended 30 June, 2018 is $86,400. This amount is to be paid on 31 October, 2018.

General Journal
Date Account Post
Ref. Debit Credit
09-06-
2018 Showroom Fittings…..Dr. 150 58,590
To,Wagner Violins 200-2 58,590
(Being Showroom Fittings purchased on Credit)
11-06-
2018 Wagner Violins…..Dr. 200-2 18,900
To, Showroom Fittings 150 18,900
(Being Showroom Fittings returned to Wagner Violins)
22-06-
2018 Sales Returns & Allowances….Dr. 402 23,562
To, Chopin Pianos 101-3 23,562
(Being goods sold on creit, returned by customer)
29-06-
2018 Dividend Declared….Dr. 302 1,77,100
To, Dividend Payable 206 1,77,100
(Being dividend declared)
30-06-
2018 Depreciation Expense- Showroom Fittings A/c……Dr. 602 56,700
To, Accum Depr. - Showroom Fittings A/c. 151 56,700
(Being depreciation charged on showroom fittings)
Depreciation Expense- Equipment A/c……Dr. 603 17,010
To, Accum Depr. - Equipment A/c. 161 17,010
(Being depreciation charged on equipment)
Rent Expense A/c…..Dr. 605 2,46,537
To, Prepaid Store Rent A/c. 104 2,46,537
(Being rent expired for the month)
Supplies Expense A/c……Dr. 604 71,190
To, Store Supplies A/c. 102 71,190
(Being office supplies consumed for the month)
Insurance Expense A/c……Dr. 606 7,560
To, Prepaid Insurance A/c. 105 7,560
(Being insurance expired for the month)
Interest Expense A/c……Dr. 608 38,945
To, Interest Payable A/c. 201 38,945
(Being interest due on loan)
Bad Debts Expense A/c……Dr. 613 29,610
To, Ludwig Trumpets A/c. 101-4 29,610
(Being due from Ludwig Trumpets written off)
Utilities Expense A/c……..Dr. 609 6,426
To, Utilities Payable A/c. 202 6,426
12

(Being utility expenses due)
Salaries Expense - Office Staff A/c……Dr. 612 36,729
To, Salaries Payable A/c. 204 36,729
(Being salary to office staff due)
Wages Expense - Sales Staff A/c…….Dr. 601 8,910
To, Wages Payable A/c. 203 8,910
(Being wages to sales staff Due)
Tax Expense A/c…….Dr. 610 86,400
To,Tax Payable A/c. 205 86,400
(Being tax expenses due)
Sales Revenue A/c……Dr. 400 44,40,555
Purchase Discounts A/c……Dr. 501 24,192
Purchase Returns & Allowance A/c…..Dr. 502 10,143
Inventory A/c……Dr. 103 14,16,492
To, Profit & Loss Summary A/c. 303 58,91,382
(Being accounts closed)
Profit & Loss Summary A/c……Dr. 303 56,32,535
To, Purchases A/c. 500 21,17,115
To, Sales Discounts A/c. 401 31,059
To, Sales Returns & Allowance A/c. 402 32,319
To, Freight- Out A/c. 600 19,908
To, Wages Expenses - Sales Staff A/c. 601 11,01,771
To, Depreciation Expense - Showroom Fittings A/c. 602 56,700
To, Depreciation Expense - Equipment A/c. 603 17,010
To, Supplies Expense A/c. 604 71,190
To, Rent Expense A/c. 605 2,46,537
To, Advertising Expense A/c. 607 43,848
To, Insurance Expense A/c. 606 7,560
To,Interest Expense A/c. 608 38,945
To, Utilities Expense A/c. 609 64,890
To, Tax Expense A/c. 610 86,400
To, Sundry Expenses A/c. 611 15,624
To, Salary Expenses - Office Staff A/c. 612 8,70,849
To, Bad Debts Expense A/c. 613 29,610
To, Inventory A/c. 103 7,81,200
(Being accounts Closed)
Profit & Loss Summary A/c……Dr. 303 2,58,847
To, Retained Profit A/c. 301 2,58,847
(Being net profit transferred to retained earnings)
Retained Profit A/c……Dr. 301 1,77,100
To, Dividend Declared A/c. 302 1,77,100
(Being dividend adjusted with retained profits)
13

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
01-06-2018 Amadeus Cellos 101-1 93,351 1,905 95,256
04-06-2018 Cash Sales 400 19,278 19,278
08-06-2018 Chopin Pianos 101-3 27,342 27,342
12-06-2016 Cash Sales 400 26,334 26,334
19-06-2018 Cash Sales 400 25,011 25,011
25-06-2018 Chopin Pianos 101-3 1,38,600 1,38,600
26-06-2018 Cash Sales 400 39,312 39,312
28-06-2018 Bach Guitars 101-2 1,16,424 1,16,424
30-06-2018 Additional Share
Capital Issued 300 1,26,000 1,26,000
30-06-2018 Cash Sales 400 23,436 23,436
30-06-2018 TOTAL 6,35,088 1,905 1,33,371 3,77,622 1,26,000
14

CAH PAYMENT JOURNAL:
Date Account Chq.
No.
Post
Ref.
Other Accounts
Payable (200)
Purchases
(500)
Cash at Bank
(100)
Purchase
Discounts (501)
DR DR DR CR CR
01-06-2018 Freight Out 153 600 7,560 7,560
03-06-2018 Schubert Synthesisers 154 200-1 43,470 42,600 870
09-06-2018 Purchase of Store
Supplies 155 102 5,544 5,544
16-06-2018 Freight Out 156 600 9,450 9,450
16-06-2018 Paid Office Staff Salaries 157 612 73,458 73,458
16-06-2018 Paid Sales Staff Wages 158 601 62,370 62,370
18-06-2018 Wagner Violins 159 200-2 1,49,814 1,49,814
23-06-2018 Donation to Charity Fund 160 611 12,600 12,600
29-06-2018 Wagner Violins 161 200-2 75,600 75,600
29-06-2018 Paid Sales Staff Wages 162 601 62,370 62,370
TOTAL 2,33,352 2,68,884 0 5,01,366 870
15

SALES JOURNAL
Date Invoice
No. Account Post Ref. Amount
01-06-
2018 910 Bach Guitars 101-2 68,292
10-06-
2018 911 Amadeus Cellos 101-1 68,796
16-06-
2018 912 Chopin Pianos 101-3 1,24,362
TOTAL 2,61,450
PURCHASE JOURNAL
Date Invoice
Date Account Terms Post Ref. Amount
15-06-2018 14-06-2018 Schubert Synthesisers 2/10,n/30 200-1 96,390
24-06-2018 22-06-2018 Wagner Violins 1/10,n/45 200-2 93,870
TOTAL 1,90,260
LEDGERS
Accounts Receivable Subsidiary Ledger
Amadeus Cellos 101-1
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 95,256
01-06-
2018 Cash Receipts CRJ 95,256 0
10-06-
2018 Credit Sales SJ 68,796 68,796
68,796
68,796
Bach Guitars 101-2
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 48,132
01-06-
2018 Credit Sales SJ 68,292 1,16,424
16

28-06-
2018 Cash Receipts CRJ 1,16,424 0
0
0
Chopin Pianos 101-3
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 65,142
08-06-
2018 Cash Receipts CRJ 27,342 37,800
16-06-
2018 Credit Sales SJ 1,24,362 1,62,162
22-06-
2018 Sales Return GJ 23,562 1,38,600
25-06-
2018 Cash Receipts CRJ 1,38,600 0
Ludwig Trumpets 101-4
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 29,610
30-06-
2018 Bad Debt expense GJ 29,610 0
0
0
0
17

Accounts Payable Subsidiary Ledger
Schubert Synthesisers 200-1
Date Explanation Invoice
Date Post.Ref. Debit Credit Balance
31-May Balance 43,470
03-06-
2018 Cash Repayments CPJ 43,470 0
15-06-
2018 Credit Purchase 14-06-
2018 PJ 96,390 96,390
96,390
96,390
Wagner Violins 200-2
Date Explanation Invoice
Date Post.Ref. Debit Credit Balance
31-May Balance 1,10,124
09-06-
2018 Credit Purchase of Boutique Lighting 08-06-
2018 GJ 58,590 1,68,714
11-06-
2018 Return of Lightings GJ 18,900 1,49,814
18-06-
2018 Cash Repayments CPJ 1,49,814 0
23-06-
2018 Credit Purchase 22-06-
2018 PJ 93,870 93,870
29-06-
2048 Partial Cash Payment CPJ 75,600 18,270
18,270
18

General Ledger
Cash at Bank 100
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 6,14,628
30-06-2018 Total Cash Receipts CRJ 6,35,088 12,49,716
Total Cash Payments CPJ 5,01,366 7,48,350
7,48,350
7,48,350
Accounts Receivable Control 101
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 2,38,140
22-06-2018 Sales Return GJ 23,562 2,14,578
30-06-2018 Total Credit Sales SJ 2,61,450 4,76,028
Total Cash Receipts CRJ 3,77,622 98,406
Bad Debt Expenses GJ 29,610 68,796
Store
Supplies 102
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 1,51,011
09-06-2018 Cash Purchase CPJ 5,544 1,56,555
30-06-2018 Supplies Expense GJ 71,190 85,365
85,365
85,365
Inventory 103
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 7,81,200
30-06-2018 Closing Entry - P/L Summary GJ 7,81,200 0
Closing Inventory GJ 14,16,492 14,16,492
14,16,492
14,16,492
Prepaid
Store Rent 104
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 7,39,620
30-06-2018 Rent Expense GJ 2,46,537 4,93,083
4,93,083
19

4,93,083
4,93,083
Prepaid
Insurance 105
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 11,340
30-06-2018 Insurance Expense GJ 7,560 3,780
3,780
3,780
3,780
Showroom Fittings 150
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 5,10,300
09-06-2018 Credit Purchase of Boutique Lighting GJ 58,590 5,68,890
11-06-2018 Return of Lightings GJ 18,900 5,49,990
5,49,990
5,49,990
Accumulated Depreciation – Showroom Fittings 151
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Depreciation Expense - Showroom
Fittings GJ 56,700 56700
56700
56700
56700
Equipment 160
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 1,73,250
1,73,250
1,73,250
1,73,250
1,73,250
Accumulated Depreciation - Equipment 161
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 85,050
30-06-2018 Depreciation Expense - Equipment GJ 17,010 102060
102060
102060
102060
20

Accounts Payable Control 200
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 1,53,594
09-06-2018 Credit Purchase of Showroom Fittings GJ 58,590 212184
11-06-2018 Return of Lightings GJ 18,900 193284
30-06-2018 Total Credit Purchase PJ 1,90,260 383544
Total Cash Repayments CPJ 2,68,884 114660
Interest Payable 201
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Interest Expenses GJ 38,945 38945
38945
38945
38945
Utilities Payable 202
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Utilities Expense GJ 6,426 6426
6426
6426
6426
Wages Payable 203
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Wages Expenses - Sales Staff GJ 8,910 8910
8910
8910
8910
Salaries Payable 204
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Salaries Expense - Office Staff A/c. GJ 36,729 36729
36729
36729
36729
Tax
Payable 205
Date Explanation Post.Ref. Debit Credit Balance
21

31-May Balance 0
30-06-2018 Tax Expenses GJ 86,400 86400
86400
86400
86400
Dividend
Payable 206
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
29-06-2018 Dividend Declared GJ 1,77,100 177100
177100
177100
177100
Mortgage
Loan 250
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 6,06,942
606942
606942
606942
606942
Share
Capital 300
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 11,34,000
30-06-2018 Additional Share Capital Issued CRJ 1,26,000 1260000
1260000
1260000
1260000
Retained Profits 301
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 9,63,522
30-06-2018 Net Profit Transferred from P/L
Summary GJ 2,58,847 1222368.6
Dividend Declared GJ 1,77,100 1045268.6
1045268.6
1045268.6
Dividends Declared 302
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
22

29-06-2018 Dividend Payable GJ 1,77,100 1,77,100
Adjusted with Retained Profits GJ 1,77,100 0
0
0
Profit & Loss Summary 303
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Total Revenue GJ 44,74,890 4474890
Closing Inventory GJ 14,16,492 5891382
Total Expenses GJ 48,51,335 1040047
Opening Inventory GJ 7,81,200 258847
Net Profit transferred to Reatined
Profits GJ 2,58,847 0
Sales Revenue 400
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 40,45,734
30-06-2018 Total credit Sales SJ 2,61,450 4307184
Total Cash Sales CRJ 1,33,371 4440555
30-06-2018 Closing Entry - P/L Summary GJ 44,40,555 0
Sales Discounts 401
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 31,059
30-Jun Total Discounts paid CRJ 1,905 32,964
30-06-2018 Closing Entry - P/L Summary GJ 32,964 0
0
0
0
Sales Returns & Allowances 402
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 8,757
22-06-2018 Sales Return GJ 23,562 32,319
30-06-2018 Closing Entry - P/L Summary GJ 32,319 0
0
0
Purchases 500
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 19,26,855
30-06-2018 Total credit Purchase PJ 1,90,260 21,17,115
30-06-2018 Closing Entry - P/L Summary GJ 21,17,115 0
23

0
0
Purchase Discounts 501
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 24,192
30-Jun Total Purchase Discount CPJ 870 25,062
30-06-2018 Closing Entry - P/L Summary GJ 25,062 0
0
0
0
Purchase Returns & Allowances 502
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 10,143
30-06-2018 Closing Entry - P/L Summary GJ 10,143 0
0
0
0
Freight-
Out 600
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 2,898
01-06-2018 Delivery Cost Paid CPJ 7,560 10,458
16-06-2018 Delivery Cost Paid CPJ 9,450 19,908
30-06-2018 Closing Entry - P/L Summary GJ 19,908 0
0
Wages Expense – Sales Staff 601
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 9,68,121
16-06-2018 Paid Wages CPJ 62,370 10,30,491
29-06-2018 Paid Wages CPJ 62,370 10,92,861
30-06-2018 Wages Payable GJ 8,910 11,01,771
30-06-2018 Closing Entry - P/L Summary GJ 11,01,771 0
Depreciation Expense – Showroom Fittings 602
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Accum Depr. - Showroom Fittings GJ 56,700 56,700
30-06-2018 Closing Entry - P/L Summary GJ 56,700 0
0
0
24

Depreciation Expense – Equipment 603
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Accum Depr. - Equipment GJ 17,010 17,010
30-06-2018 Closing Entry - P/L Summary GJ 17,010 0
0
0
Supplies Expense 604
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Store Supplies GJ 71,190 71,190
30-06-2018 Closing Entry - P/L Summary GJ 71,190 0
0
0
Rent
Expense 605
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Prepaid Store Rent GJ 2,46,537 2,46,537
30-06-2018 Closing Entry - P/L Summary GJ 2,46,537 0
0
0
Insurance Expense 606
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Prepaid Insurance GJ 7,560 7,560
30-06-2018 Closing Entry - P/L Summary GJ 7,560 0
0
0
Advertising Expense 607
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 43,848
30-06-2018 Closing Entry - P/L Summary GJ 43,848 0
0
0
0
Interest Expense 608
Date Explanation Post.Ref. Debit Credit Balance
25

31-May Balance 0
30-06-2018 Interest Payable GJ 38,945 38,945
30-06-2018 Closing Entry - P/L Summary GJ 38,945 0
0
0
Utilities Expense 609
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 58,464
30-06-2018 Utilities Payable GJ 6,426 64,890
30-06-2018 Closing Entry - P/L Summary GJ 64,890 0
0
Tax
Expense 610
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Tax Payable GJ 86,400 86,400
30-06-2018 Closing Entry - P/L Summary GJ 86,400 0
0
0
Sundry Expenses 611
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 3,024
23-06-2016 Donation to Charity Fund CPJ 12,600 15,624
30-06-2018 Closing Entry - P/L Summary GJ 15,624 0
0
0
Salaries Expense – 612
Office Staff
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 7,60,662
16-06-2018 Salary Paid CPJ 73,458 8,34,120
30-06-2018 Salaries Payable GJ 36,729 8,70,849
30-06-2018 Closing Entry - P/L Summary GJ 8,70,849 0
0
Bad Debts Expense 613
Date Explanation Post.Ref. Debit Credit Balance
31-May Balance 0
30-06-2018 Accounts Receivable 101-4 29,610 29,610
30-06-2018 Closing Entry - P/L Summary GJ 29,610 0
26

0
0
27

WORKSHEET – 30 JUNE 2018
Unadjusted Trial
Bal. Adjustments Adjusted Trial Bal. Income Statement Balance Sheet
Account Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash at Bank 7,48,350 7,48,350 7,48,350
Accounts Receivable
Control 98,406 29,610 68,796 68,796
Store Supplies 1,56,555 71,190 85,365 85,365
Inventory 7,81,200 7,81,200 7,81,200 14,16,492 14,16,492
Prepaid Store Rent (Paid 1
Mar. 2018) 7,39,620 2,46,537 4,93,083 4,93,083
Prepaid Insurance (Paid 1
Nov. 2017) 11,340 7,560 3,780 3,780
Showroom Fittings 5,49,990 5,49,990 5,49,990
Accumulated Depreciation
– Showroom Fittings 0 56,700 56,700 56,700
Equipment 1,73,250 1,73,250 1,73,250
Accumulated Depreciation
- Equipment 85,050 17,010 1,02,060 1,02,060
Accounts Payable Control 1,14,660 1,14,660 1,14,660
Interest Payable 0 38,945 38,945 38,945
Utilities Payable 0 6,426 6,426 6,426
Wages Payable 0 8,910 8,910 8,910
Salaries Payable 0 36,729 36,729 36,729
Tax Payable 0 86,400 86,400 86,400
28

Dividend Payable 1,77,100 1,77,100 1,77,100
Mortgage Loan (due 31 Jul
2042) 6,06,942 6,06,942 6,06,942
Share Capital 12,60,000 12,60,000 12,60,000
Retained Profits (1 July
2017) 9,63,522 9,63,522 9,63,522
Dividends Declared 1,77,100 1,77,100 1,77,100
Profit and Loss Summary
Sales Revenue 44,40,555 44,40,555 44,40,555
Sales Discounts 32,964 32,964 32,964
Sales Returns and
Allowances 32,319 32,319 32,319
Purchases 21,17,115 21,17,115 21,17,115
Purchase Discounts 25,062 25,062 25,062
Purchase Returns and
Allowances 10,143 10,143 10,143
Freight-Out 19,908 19,908 19,908
Wages Expense - Sales
Staff 10,92,861 8,910 11,01,771 11,01,771
Depreciation Expense -
Showroom Fittings 0 56,700 56,700 56,700
Depreciation Expense -
Equipment 0 17,010 17,010 17,010
Supplies Expense 0 71,190 71,190 71,190
Rent Expense 0 2,46,537 2,46,537 2,46,537
Insurance Expense 0 7,560 7,560 7,560
Advertising Expense 43,848 43,848 43,848
Interest Expense 0 38,945 38,945 38,945
Utilities Expense 58,464 6,426 64,890 64,890
Tax Expense 0 86,400 86,400 86,400
Sundry Expenses 15,624 15,624 15,624
29

Salaries Expense - Office
Staff 8,34,120 36,729 8,70,849 8,70,849
Bad Debts Expense 0 29,610 29,610 29,610
TOTALS 76,83,034 76,83,034 6,06,017 6,06,017 79,34,154 79,34,154 56,34,440 58,92,252 37,16,206 34,58,394
PROFIT/(LOSS) 2,57,812 2,57,812
76,83,034 76,83,034 6,06,017 6,06,017 79,34,154 79,34,154 58,92,252 58,92,252 37,16,206 37,16,206
30

FINANCIAL STATEMENTS
Schedules of Subsidiary Ledgers
Schedule of Accounts Receivable
as at 30 June 2018
Acc. No. Account Amount
($)
101-1 Amadeus Cellos 68,796
101-2 Bach Guitars 0
101-3 Chopin Pianos 0
101-4 Ludwig trumpets 0
TOTAL 68,796
Schedule of Accounts Payable
as at 30 June 2018
Acc. No. Account Amount
($)
200-1 Schubert Synthesisers 96,390
200-2 Wagner Violins 18,270
TOTAL 1,14,660
31

Income Statement
for the year ending 30 June 2018
Gross Sales 44,40,555
Less: Sales Returns 32,319
Less: Sales Discounts 32,964
Net Sales 43,75,272
Purchases 21,17,115
Less: Purchase Returns 25,062
Less: Purchase Discounts 10,143
Net Purchases 20,81,910
Add: Opening Stock 7,81,200
Cost of Goods Available for Sales 28,63,110
Less: Closing Stock 14,16,492
Cost of Goods Sold 14,46,618
Gross Profit 29,28,654
Other Revenue 0
Expenses
Selling Expenses
Freight Out 19,908
Wages Expenses - Sales Staff 11,01,771
Depreciation Expense - Showroom
Fittings 56,700
Advertising Expenses 43,848
Bad Debt Expense 29,610
Total Selling Expenses 1251837
Administration Expenses
Depreciation Expense - Equipment 17,010
Supplies Expense 71,190
Rent Expense 2,46,537
Insurance Expense 7,560
Utilities Expense 64,890
Sundry Expense 15,624
Salaries Expense - Sales Staff 8,70,849
Total Administration Expense 1293660
Financial Expenses
Interest Expenses 38,945
Total Financial Expense 38,945
Total Expenses 25,84,442
32

Profit Before Income Tax 3,44,212
Income Tax Expense 86,400
Profit After Income Tax 2,57,812
33

Statement of Changes in Equity
for the year ending 30 June 2018
Share
Capital
Retained
Profits
Total
Equity
Opening Balance as at 1 July 2017 11,34,000 9,63,522 20,97,522
Add: Additional Share Capital 1,26,000 1,26,000
Add: Net Profit for the period 2,57,812 2,57,812
Less: Dividend Declared 1,77,100 1,77,100
Ending Balance as at 30 June 2018 12,60,000 10,44,234 23,04,234
34

Statement of Financial Position
as at 30 June 2018
Current Assets
Cash at Bank 7,48,350
Accounts Receivable Control 68,796
Store Supplies 85,365
Inventory 14,16,492
Prepaid Store Rent 4,93,083
Prepaid Insurance 3,780
Total Current Assets 28,15,866
Non-Current Assets
Showroom Fittings 5,49,990
Accumulated Depreciation – Showroom Fittings -56,700
Equipment 1,73,250
Accumulated Depreciation - Equipment -1,02,060
Total Non-Current Assets 5,64,480
TOTAL ASSETS 33,80,346
Current Liabilities
Accounts Payable Control 1,14,660
Interest Payable 38,945
Utilities Payable 6,426
Wages Payable 8,910
Salaries Payable 36,729
Tax Payable 86,400
Dividend Payable 1,77,100
Total Current Liabilities 4,69,170
Non-Current Liabilities
Mortgage Loan (due 31 Jul 2042) 6,06,942
Total Non-Current Liabilities 6,06,942
TOTAL LIABILITIES 10,76,112
Shareholder's Equity
Share Capital 12,60,000
Retained Profits (as on 30 June 2018) 10,44,234
Total Shareholder's Equity 23,04,234
TOTAL LIABILITIES & EQUITY 33,80,346
35

Post-closing Trial Balance
As at 30 June 2018
Acc. No. Account Debit ($) Credit
($)
100 Cash at Bank 7,48,350
101 Accounts Receivable Control 68,796
102 Store Supplies 85,365
103 Inventory 14,16,492
104 Prepaid Store Rent 4,93,083
105 Preapid Insurance 3,780
150 Showroom Fittings 5,49,990
151 Accumulated Depreciation – Showroom Fittings 56,700
160 Equipment 1,73,250
161 Accumulated Depreciation - Equipment 1,02,060
200 Accounts Payable Control 1,14,660
201 Interest Payable 38,945
202 Utilities Payable 6,426
203 Wages Payable 8,910
204 Salaries Payable 36,729
205 Tax Payable 86,400
206 Dividend Payable 1,77,100
250 Mortgage Loan (due 31 Jul 2042) 6,06,942
300 Share Capital 12,60,000
301 Retained Profits 10,44,234
3539106 3539106
36

WRITTEN COMPONENT
37

38

39

40

STUDENT DECLARATION FOR COMPLETION OF WORK
Academic misconduct as defined in the "Guidelines on Ethical Scholarship, Academic Literacy and Academic Misconduct" is any
activity or practice engaged in by a student that breaches explicit guidelines relating to the production of work for assessment, in
a manner that compromises or defeats the purpose of that assessment. Students must not engage in academic misconduct.
Penalties for academic misconduct vary according to seriousness of the case, and may include the requirement to do further
work or repeat work; deduction of marks; the award of zero marks for the assessment; failure of one or more units; suspension
from a course of study; exclusion from the University; non-conferral of a degree, diploma or other award to which the student
would otherwise have been entitled. For further information on the rules and procedures in respect of appropriate academic
conduct you should visit:
http : //www.teachingandlearning.uwa.edu.au/tl4/for_uwa_staff /nolicies/student_related_policies/academic_conduct
Plagiarism is one example of academic misconduct
1. Plagiarism is taking someone else's thought, writing or invention and claiming it as your own.
2. All references to other work must be properly cited in the text eg. (Smith 1996) and the e article must be fully described in
a references section including author's name, date, title, book/journal, volume/ page numbers.
The Faculty of Business has the following regulation on Plagiarism:
"The Faculty will promote the highest levels of probity and honesty amongst students and will provide instruction on ethical
conduct. By submitting assignments and other work for assessment, students acknowledge Faculty's duty to guard against
plagiarism, including by electronic means such as Turnitin or Mydropbox. A lecturer may require students submitting
written or electronic work to sign a Plagiarism Declaration Form indicating that the work is original.”
No assignment will be accepted unless the following statement is signed and dated:
"I certify that I possess a copy of the attached work submitted."
"I certify that the attached assignment/report is my own work and that all material drawn from other sources
has been fully acknowledged."
“I acknowledge that by submitting my assignment with this generic cover page and not the automated version
available to me that I will not receive an email receipt from the Business School.”
I
Signed _______________________________ Date ______________________________
_____________________________ ___________________________
_______________________________ _____________________________
41