Homework Week 3

Part A. Transactions for the month of December,

2018.

1 1/12 Elvina, (sole owner of the business) deposited $120

000 in the bank to establish ‘Artsy Ceramics’ a craft
manufacturer and retail business in the eastern
suburbs.
2 3/12 Elvina bought three vans for $100 000; $30 000 paid
in cash and the balance with a bank loan.
3 4/12 Paid rent for December, January & February -
$6,000 in total
4 8/12 Purchased equipment for $5 000 cash.
5 12/12 Paid for petrol, oil and servicing of vans $1 000 cash.

6 16/12 Elvina used $800 from the business bank account to

pay insurance on her house ($400) and buy supplies
(all to be used in December) for her employees
($400).
7 20/12 Paid $70 000 owing on vans.
8 23/12 Paid wages of shop employees for the month of
December $2 500.
9 27/12 Sent an invoice to Gifts R Us t Ltd. for the delivery of
a range of craftwares at an agreed price of $12,000.
Gifts R Us Ltd are a retail organisation who intend to
sell these wares in a series of markets and stalls and
hope to generate in excess of $25 000.
10 Signed a contract to supply craftwares to the DJ Ltd.
stores throughout Australia for the next 5 years. The
agreed amount was $200 000.

Required:

a) Assess the above transactions and determine their effects on the

Transaction Analysis Table
b) Record the transactions in the General Journal of Artsy Ceramics.
c) Post journal entries to ledger accounts.
d) Prepare a trial balance.
Date A L OE DR CR
1/12 Cash ↑ 120,000
Capital ↑ 120,000
3/12 Motor ↑ 100,000
Vehicles
Cash ↓ 30,000
Bank ↑ 70,000
Loan
4/12 Prepaid ↓ 6,000
Rent
Cash ↓ 6,000
8/12 Equipment ↑ 5,000
Cash ↓ 5,000
12/1 Vehicle ↓ 1,000
2 Maintenance
Expense
Cash ↓ 1,000
16/1 Drawings ↓ 400
2
Supplies ↑ 400
Cash ↓ 800
20/1 Bank Loan ↓ 70,000
2
Cash ↓ 70,000
23/1 Wages ↓ 2,500
2 Expense
Cash ↓ 2,500
27/1 Sales ↑ 12,000
2
Debtors 12,000

Bank / Cash at bank / Cash

1/12 Capital 120,000 3/12 Motor Vehicles 30,000

4/12 Rent Expense 6,000
8/12 Equipment 5,000
12/2 Vehicle Maintenance 1,000
Expenses
16/1 Drawings 400
2 Supplies 400
16/1 Bank Loan 70,000
 2 Wages Expense 2,500
20/1
Balance 4,700 2
23/1
2

Capital

1/02 Opening Balance 120,000

Balance 120,000

Motor Vehicle

2/12 Cash/Bank Loan 100,000

Balance 100,000

Debtors

27/12 Sales 12,000

Balance 12,000

Equipment

8/12 Cash 5,000

Balance 5,000

Wages expense

23/12 Bank 2,500

Balance 2,500

Rent Expense

4/12 Bank 6000

Balance 6000
Sales revenue

27/12 Sales 12,000

Balance 12,000

Vehicle Maintenance Expense

5/12 Cash $1,000

Balance 1,000

Drawings

16/12 Bank 400

Balance 400

Supplies

23/12 Bank 400

Balance 400

Account Debit Credit

Bank 4,700
Motor Vehicles 100,000
Equipment 5,000
Debtors 12,000
Supplies 400
Capital 120,000
Sales Revenue 12,000
Drawings 400
Wages expense 2,500
Rent expense 6,000
Vehicle Maintenance 1,000
Expense

132,000 132,000