|
Date |
Details |
Debit ($) |
Credit ($) |
|
01-Nov |
Bank and Cash a/c |
1,540.00 |
|
|
To Revenue a/c |
1,540.00 |
||
|
(Being cash received form a student towards fee for watch-making school) |
|||
|
02-Nov |
Drawings a/c |
183.00 |
|
|
To Bank and Cash a/c |
183.00 |
||
|
(Being spent by the proprietor towards personal expenses towards physiotherapist charges) |
|||
|
04-Nov |
Bank and Cash a/c |
2,016.00 |
|
|
Debtors for goods-Hilton Hotels a/c |
8,064.00 |
||
|
To Revenue a/c |
10,080.00 |
||
|
(Being sold to Hilton hotel partly in cash and partly in credit) |
|||
|
13-Nov |
Laptop a/c |
2,760.00 |
|
|
To Bank and Cash a/c |
2,760.00 |
||
|
(Being laptop purchased in cash for business) |
|||
|
14-Nov |
Cleaning Expenses a/c |
120.00 |
|
|
To Creditors for expense- Busy bee Cleaners |
120.00 |
||
|
(Being invoiced raised by busy bee cleaners towards cleaning expense- invoice ref 6435) |
|||
|
17-Nov |
Furniture a/c |
6,272.00 |
|
|
To Bank and Cash a/c |
3,136.00 |
||
|
To Creditors for furniture a/c |
3,136.00 |
||
|
(Being 7 adjustable purchased, partly in cash partly in credit) |
|||
|
29-Nov |
Electricity Expenses a/c |
1,376.00 |
|
|
To Bank and Cash a/c |
1,376.00 |
||
|
(Being electricity expenses for the quarter paid) |
|||
|
30-Nov |
Bank and Cash a/c |
8,064.00 |
|
|
To Debtors for goods-Hilton Hotels a/c |
8,064.00 |
||
|
(Being Amount received form Hilton Hotels towards sale made on 4th Nov) |
|||
Cash at Bank (CAB)
|
December 1 |
Balance |
44668 |
December 1 |
Shop Fittings |
15000 |
|
December 9 |
Capital |
23500 |
December 4 |
Drawings |
15 |
|
December 24 |
Sales |
11980 |
December 18 |
Loan |
15800 |
|
December 31 |
Balance |
49333 |
|||
|
80148 |
80148 |
Accounts Receivable (A/R)
|
December 1 |
Balance |
8656 |
December 31 |
Balance |
11856 |
|
December 24 |
Sales |
3200 |
|||
|
11856 |
11856 |
Shop Fittings
|
December 1 |
Balance |
26850 |
December 31 |
Balance |
80850 |
|
December 1 |
Cash and Bank |
15000 |
|||
|
December 1 |
Loan |
39000 |
|||
|
80850 |
80850 |
Computer
|
December 9 |
Capital |
1500 |
December 31 |
Balance |
1500 |
|
1500 |
1500 |
Advertising Payable
|
December 31 |
Balance |
1250 |
December 24 |
Advertising |
1250 |
|
1250 |
1250 |
Loan
|
December 18 |
Cash and Bank |
15800 |
December 1 |
Shop Fittings |
39000 |
|
December 31 |
Balance |
23200 |
|||
|
39000 |
39000 |
Drawings
|
December 1 |
Balance |
40 400 |
December 31 |
Balance |
40415 |
|
December 4 |
Cash and Bank |
15 |
|||
|
40415 |
40415 |
Capital
|
December 31 |
Balance |
153708 |
December 1 |
Balance |
128708 |
|
December 9 |
Cash and bank |
23500 |
|||
|
December 9 |
Computer |
1500 |
|||
|
153708 |
153708 |
Sales
|
December 31 |
Balance |
170731 |
December 1 |
Balance |
155551 |
|
December 24 |
Cash and Bank |
11980 |
|||
|
December 24 |
Account Receivables |
3200 |
|||
|
170731 |
170731 |
Advertising
|
December 26 |
Advertising Payable |
1250 |
December 31 |
Balance |
1250 |
|
1250 |
1250 |
Classic Clocks – Trial Balance-31-Dec-18
|
Debit ($) |
Credit ($) |
|
|
Electricity Expense |
9,165 |
|
|
Telephone Expense |
1,555 |
|
|
Motor Vehicle |
31,150 |
|
|
Cash at Bank |
49,333 |
|
|
Advertising Expense |
1,250 |
|
|
Accounts Payable |
1,250 |
|
|
Office Supplies Expense |
1,713 |
|
|
Drawings – Cogsworth |
40,415 |
|
|
Office Gas Expense |
2,275 |
|
|
Water Expense |
2,661 |
|
|
Capital – Cogsworth |
1,53,708 |
|
|
Accounts Receivable |
11,856 |
|
|
Loan |
23,200 |
|
|
Accumulated Depreciation – Motor Vehicle |
14,489 |
|
|
Stock / Clocks |
65,256 |
|
|
Shop Fittings |
80,850 |
|
|
Repairs and Maintenance Payable |
4,913 |
|
|
Sales |
1,70,731 |
|
|
Accumulated Depreciation – Cash Register and Scanning Equipment |
15,042 |
|
|
Cash Register and Scanning Equipment |
22,542 |
|
|
Discount Allowed |
919 |
|
|
Rent Expense |
52,354 |
|
|
Repairs and Maintenance |
3,637 |
|
|
Sales Returns & Allowances |
473 |
|
|
Interest expense |
4,429 |
|
|
Computer |
1,500 |
|
|
Totals |
3,83,333 |
3,83,333 |
2.Dan Stevens
Managing Director
Mandeville Accounting Solutions Pty Ltd
1800 Adelaide Terrace
Adelaide, SA 5000
3rd December 2017
Dear Mr Stevens,
With respect to the journal entries passed in the books on 2nd of November and on 14th of November the following explanation is being provided:
- 2ndNovember 2017: the accounting assumption used for this transaction is business entity assumption, also popularly known as separate entity assumption. Under this assumption it has been explained that the entity has a separate financial status and that it is separate from its owners. To further explain this, we can say that the business entity is to be treated as a separate person from its owners. Under this transaction, since the expense is a personal expense of the proprietor, it has been charged to the drawings account. It is not a business expense and has been deducted from the capital of the proprietor. (Piper, 2015)
- 14thNovember 2017: the account credited in this journal is Creditors for expense- Busy bee Cleaners account which is in the element of liability. The company has used the services of Busy Bee Cleaners and is entitled to pay for the same. A liability is a sacrifice of the economic benefits of the entity as a result of any past event which will be settled by outflow of resources. Therefore, in the given case the past event is using the services of Busy Bee Cleaners and sacrifice will be made by outflow of cash. (Siciliano, 2015)
I hope that the above helps to clear the confusion regarding the transactions recorded. Kindly let me know in case any future explanation is required.
Yours Sincerely
Claude Cogsworth
Classic Clocks
References:
Piper, M. (2015). Accounting made simple. United States: CreateSpace Pub.
Siciliano, G. (2015). Finance for Nonfinancial Managers. New York: McGraw-Hill.
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