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Accounting Cycle Extra Practice

Maria George established Busy Bookkeepers Pty Ltd on January 1, 2010, with various transactions occurring throughout the month, including cash investments, hiring staff, and service revenues. The document outlines the necessary accounting tasks such as journalizing transactions, posting to ledger accounts, preparing a trial balance, and creating financial statements. The accounting cycle practice excludes adjusting entries and focuses on the initial month of operations.

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6 views

Accounting Cycle Extra Practice

Maria George established Busy Bookkeepers Pty Ltd on January 1, 2010, with various transactions occurring throughout the month, including cash investments, hiring staff, and service revenues. The document outlines the necessary accounting tasks such as journalizing transactions, posting to ledger accounts, preparing a trial balance, and creating financial statements. The accounting cycle practice excludes adjusting entries and focuses on the initial month of operations.

Uploaded by

d2701home
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Accounting cycle practice (excluding adjusting entries)

Maria George incorporated Busy Bookkeepers Pty Ltd, a bookkeeping practice, on 1


January 2010. During the first month of operations, these events and transactions
occurred:

Jan. 2 Shareholders invested $88 000 cash in exchange for shares in the
company.

3 Hired a receptionist at a salary of $2000 per month.

4 Purchased $1600 of supplies on account from Abbey Supply Ltd.

7 Paid office rent of $2400 for the month.

1 Invoiced the clients $3800 for services provided.


1
1 Received $3000 advance on a management consulting engagement.
2
1 Received cash of $1700 for services completed for Pete's Plumbing.
7 (These services were not included in the 11 January transaction.)

3 Paid receptionist $2000 salary for the month.


1
3 Paid 40% of balance owing to Abbey Supply Ltd.
1

The following chart of accounts is used: (100) Cash, (110) Accounts Receivable, (115)
Supplies, (200) Accounts Payable, (210) Revenue Received in Advance, (300) Share
Capital, (400) Service Revenue, (500) Salaries Expense, and (510) Rent Expense.

Required

(a) Journalise the transactions, including narrations.

(b) Post to the ledger T accounts (including closing entries).

(c) Prepare a trial balance as at 31 January 2010.

(d) Prepare an income statement for the month of January and a classified
statement of financial position as at 31 January 2010.
Lecture Illustration
(a) General Journal entries - Busy Bookkeepers Pty. Ltd.
Date Account title and Narration Post Debit Credit
Ref

(b) Ledger Accounts - Busy Bookkeepers Pty Ltd


Cash 100
Accounts Receivable 110

Supplies 115

Accounts Payable 200

Revenue received in advance 210

Share Capital 300

Service Revenue 400

Salaries Expense 500

Rent Expense 510


(c) Trial Balance at 31 January 2010– Busy Bookkeepers

Account Debit Credit


$ $

Income Summary

Retained Earnings

(d) Busy Bookkeepers Pty Ltd


Income Statement
For the Month Ended 31 January 2010

Revenues

Expenses

Total expenses
Profit
(e)
Busy Bookkeepers Pty Ltd
Statement of Financial Position
For the Month Ended 31 January 2010

Assets $ $

TOTAL ASSETS

Liabilities and Equity


Liabilities

TOTAL LIABILITIES

Equity

TOTAL EQUITY

TOTAL LIABILITIES AND EQUITY

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