Basic Accounting Equation

Transactions

1. Bought stock from Lerm Wholesalers and paid by cheque, R3 120.

2. Sold stock on cash basis, cost price R320 and selling price R480.
3. Drew a cheque for petty cash, R150.
4. Received R900 from the tenant who rents a building from the business.
5. The owner drew a cheque for R550 for own use.
6. The owner deposited additional capital, R3 000.
7. Bought stationery from trio printers by cheque, R116.
8. Drew a cash cheque to pay the wages, R410.
9. Sent a cheque to Telkom in payment of the telephone account, R155.
10. Received a service invoice to repairs from Presto and paid by cheque, R230.
11. Bought a computer for office use and paid by cheque, R4 800.
12. Issued a cheque to wantons for R1 200.This was for the purchase of stationery for the
business’s use, R400, purchased of schoolbooks for the owner’s children, R350 and
stationery for resale, R450.
13. Issued a cheque for R2300 for the purchase of trading stock of R1800, the rest for the
purchase of packing material.
14. Issued a cheque to Ster Motors for R16 000 for the purchase of second-hand vehicle for
R15 000, as well as repairs to the windscreen.

Required

Use the given (independent) transactions and complete the columns below.

Vat added tax

Skyfall Traders sells kitchenware. The following transactions occurred during December
2020.Assume that all parties are registered for VAT and standard rate is 15%, expect where indicated
otherwise. The entity uses the periodic inventory system.

1. Purchased kitchenware from Goldeneye Traders for R71 820 cash.

2. Sold kitchenware to Quantum Stores for R176 700 on credit.
3. Paid salaries for the month, R75 000.
4. Bought a new computer from I Store for R11 400 paid with a cheque.
5. Bought kitchenware from Dr No for R20 000 cash. Dr No is not registered for VAT.
6. Paid monthly rental of the photocopier of R570 to Nashua.
7. Sold kitchenware to Felix Leiter for R36 480 cash. Felix is not a registered for VAT.
Required:

Provide the journal entries in the general journal to record the above-mentioned transactions.
Journal narrations are not required.

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 No. General ledger Asset Owners’ equity Liabilities
Account Account Effect and Effect and Effect and
debited credited amount amount amount
1. Trading stock Bank +R3 120 0 0
-R3 120
2. Bank Sales +R480 +R480 0
Cost of sales Trading stock +R320 +R320 0
3. Petty cash Bank -R150 0 0
+R150
4. Bank Rent income +R900 +R900 0
5. Drawings Bank -R550 -R550 0
6. Bank Capital +R3 000 +R3 000 0
7. Stationery Bank -R116 0 0
+R116
8. Wages Bank -R410 -R410 0
9. Telephone Bank -R155 -R155 0
10. Repairs Bank -R230 -R230 0
11. Computer Bank -R4 800 0 0
equipment +R4 800
12. Stationery Bank -R1 200 -R350 0
Drawings +R400
Trading stock +R450
13. Trading stock Bank -R2 300 -R500 0
Packing +R1 800
material
14. Motor vehicle Bank -R16 000 -R1 000 0
Repairs +R15 000

General journal

Debit Credit
1.Purchases R62 452,17
Vat input R9 367,82
Bank R71 820
2.Debtors Control R176 700
Vat output R23 047,83
Sales R153 652,17
3. Salaries R75 000
Bank R75 000
4.Computer R9 913,04
Vat input R1 489,96
Bank R11 400
5. Purchases R20 000
Bank R20 000
6. Rent R4 95,65
Vat input R74,34
Bank R570
7.Bank R36 480
Vat output R4 758,26

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 Sales R31 721,74

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