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Session 1, 2011
AFM1A
Alex Schubert owns Piano Tuning Service Ltd. The post-closing trial balance at 30 June 2009 is shown below. Account Account number Debit Credit Cash at bank A1 3 280 Accounts receivable A2 3 880 Prepaid insurance A3 190 Supplies A4 210 Motor vehicle A5 21 400 Accumulated depreciation motor A5.1 8 026 vehicle Accounts payable L1 1 940 Interest payable L2 440 Bank loan L3 7 000 Share capital SE1 11 000 Retained profits SE2 554 $28 960 $28 960
The Chart of Accounts is shown below: Account Account number Cash at bank A1 Accounts receivable A2 Prepaid insurance Supplies Motor vehicle Accumulated depreciation motor vehicle Accounts payable Interest Payable Bank loan Telephone expense payable Share capital A3 A4 A5 A5.1 L1 L2 L3 L4 SE1
Account Retained earnings Profit and loss summary Piano tuning fees Piano repair fees Petrol and oil expense Depreciation expense motor vehicle Supplies expense Insurance expense Telephone expense Interest expense
Transactions completed during the year ended 30 June 2010 are summarised below: 1. Tuning fees of $28 600 were receivable during the year; $23 940 of this total was received in cash. The remainder consisted of transactions on credit. 2. Revenue from piano repairs was $24 380. Cash received totalled $16 800, and accounts receivable increased by $7 580. 3. Supplies costing $340 were purchased during the year on credit. 4. On 1 January 2010, Piano Tuning Service Ltd paid $3 000 off the bank loan, plus interest of $860. The interest payment consisted of $440 accrued up to 1 July 2009 and a further $420 which accrued for the period to 31 December 2009. 5. Petrol and oil for the vehicle cost $ 2680 in cash. 6. Insurance on the vehicle, paid in advance was $840. Session 1, 2011 AFM1A 2
7. Telephone expense of $2 240 was paid. 8. Accounts receivable of $13 900 were collected, and $2 000 was paid on accounts payable. The following information relating to adjusting entries is available at the end of June 2010. 9. A physical count showed supplies costing $180 on hand at 30 June 2010. 10. Accrued interest on the bank loan is $240. 11. Insurance costing $820 expired during the year. 12. Depreciation on the vehicle is $5 350. 13. The June telephone account for $180 has not been paid or recorded. Required: A. Prepare transaction analysis using excel sheet. B. Prepare journal entries to record the transactions completed in the year to 30 June 2010. C. Open ledger accounts for each of the accounts, and post the journal entries to the ledger. D. Prepare a 10-column worksheet. E. Prepare an adjusted trial balance as at 30 June 2010. F. Prepare and post the closing entries. G. Prepare a post-closing trial balance as at 30 June 2010. H. Prepare the Financial Statements.
Session 1, 2011
AFM1A
TRANSACTION ANALYSIS
Cash O/B 1 2 3 4 -3860 5 6 7 -2240 8a 8b 9 13900 -2000 -2680 -840 3280 23940 16800
Supplies 210
Retained profit 554 28600 24380 Revenue Revenue Interest expense Petro expense Telephone expense
340
840 -2240 -13900 -2000 -370 -370 240 -240 -820 5350 -5350 180 -180 4000 11000 41234 Supplies expense Interest expense Insurance expense Depreciation expense Telephone expense
10 11 -820 12 13 C/B 46300 2220 210 180 21400 13376 280 240 180
Session 1, 2011
AFM1A
JOURNALS 1 Cash Accounts Receivable Piano Tuning Fees Cash Accounts Receivable Piano Repair Fees Supplies Accounts Payable AC A1 A2 R1 A1 A2 R2 A4 L1 Debit 23 940 4 660 Credit
Bank Loan Interest Payable Interest Expense Cash Petrol and Oil Expense Cash
L3 L2 E6 A1 E1 A1
A3 A1
840 840
E5 A1
2 240 2 240
8a
A1 A2
13 900 13 900
8b
L1 A1
2 000 2 000
E3 A4
370 370
10
E6 L2
240 240
11
E4 A3
820 820
Session 1, 2011
AFM1A
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E2 A5.1
5 350 5 350
13
E5 L4
180 180
Session 1, 2011
AFM1A
LEDGERS
Opening Balance Piano Tuning Fees Piano Repair Fees Accounts Receivable Cash at bank 3 280 23 940 16 800 13 900 Bank Loan Interest Payable Interest Expense Petrol and Oil Expense Prepaid Insurance Telephone Expense Accounts Payable Closing Balance A1 3 000 440 420 2 680 840 2 240 2 000 46 300 $57 920
Opening Balance
$57 920 46 300 Accounts receivable 3 880 4 660 7 580 $16 120 2 220 Prepaid insurance
Opening Balance Piano Tuning Fees Piano Repair Fees Opening Balance
Opening Balance
210
Supplies 210
340 $550 180
Closing Balance
A5 21 400
Accumulated depreciation motor vehicle Opening Balance Closing Balance 13 376 Depreciation Exp Opening Balance Accounts Payable 2 000 280
$2 280
Session 1, 2011
AFM1A
L2 Opening Balance Interest Expense Opening Balance 440 240 $680 240
Opening Balance
L3 7 000
Opening Balance
$7 000 4 000
Closing Balance
Closing Balance
Revenues
P/L Summary
R1 28 600
P/L Summary
R2 24 380
Session 1, 2011
AFM1A
Cash
P/L Summary
E1 2 680
Acc Depn
E2 5 350
Supplies
P/L Summary
E3 370
Prepaid Insurance
P/L Summary
E4 820
P/L Summary
E5 2 420 $2 420
P/L Summary
E6 660 $660
Session 1, 2011
AFM1A
WORKSHEET Piano Tuning Service Ltd Worksheet Adjusted Trial Balance Adjustments Trial Balance Acc. Co. A1 A2 A3 A4 A5 A5.1 L1 L2 L3 L4 SE1 SE2 SE3 R1 R2 E1 E2 E3 E4 E5 E6 Account Name Cash at bank Accounts receivable Prepaid insurance Supplies Motor vehicle Accumulated depreciation MV Accounts payable Interest payable Bank loan Telephone expense payable Share capital Retained earnings Profit and loss summary Piano tuning fees Piano repair fees Petrol and oil expense Depreciation expense MV Supplies expense Insurance expense Telephone expense Interest expense NET PROFIT (LOSS) Debit 46 300 2 220 1 030 550 21 400 Credit Debit Credit Debit Credit 46 300 2 220 820 210 370 180 21 400 5 350 13 376 280 240 240 4 000 180 180 11 000 554 28 600 24 380 5 350 370 820 180 240 $6 960 2 680 5 350 370 820 2 420 660 $6 960 $82610 $82610 2 680 5 350 370 820 2420 660 $70130 $70130 40 680
Session 1, 2011
AFM1A
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Account Cash at bank Accounts receivable Prepaid insurance Supplies Motor vehicle Accumulated depreciation motor vehicle Accounts payable Interest payable Bank loan Telephone expense payable Share capital Retained earnings Piano tuning fees Piano repair fees Petrol and oil expense Depreciation expense motor vehicle Supplies expense Insurance expense Telephone expense Interest expense
Credit
13 376 280 240 4 000 180 11 000 554 28 600 24 380 2 680 5 350 370 820 2 420 660 $82 610
$82 610
CLOSING ENTRIES 1 Piano Tuning Fees Piano Repair Fees Profit and Loss Summary Profit and Loss Summary Petrol and Oil Expense Depreciation Expense MV Supplies Expense Insurance Expense Telephone Expense Interest Expense Profit and Loss Summary Retained Earnings PR R1 R2 SE3 SE3 E1 E2 E3 E4 E5 E6 SE3 SE2 Debit 28 600 24 380 Credit
52 980 12 300 2 680 5 350 370 820 2 420 660 40 680 40 680
Session 1, 2011
AFM1A
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POST-CLOSING TRIAL BALANCE Account code A1 A2 A3 A4 A5 A5.1 L1 L2 L3 L4 SE1 SE2 $70 310
Account Cash at bank Accounts receivable Prepaid insurance Supplies Motor vehicle Accumulated depreciation motor vehicle Accounts payable Interest payable Bank loan Telephone expense payable Share capital Retained earnings
Credit
FINANCIAL STATEMENTS PIANO SERVICE TUNING LTD PROFIT AND LOSS STATEMENT for Year Ending 30 June 2010 Revenue Piano tuning fees Piano repair fees GROSS PROFIT Expenses Petrol and oil expenses Depreciation expense motor vehicle Supplies expense Insurance expense Telephone Expense Interest Expense NET PROFIT/LOSS
Session 1, 2011
AFM1A
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PIANO SERVICE TUNING LTD BALANCE SHEET as at 30 June 2010 Current Assets Cash at bank Accounts receivable Prepaid insurance Supplies Non-current Assets Motor vehicle Accumulated depreciation motor vehicle TOTAL ASSETS Current Liabilities Accounts payable Interest payable Telephone expense payable Non-current Liabilities Bank loan TOTAL LIABILITIES Shareholders Equity Share capital Retained profits TOTAL SHAREHOLDERS EQUITY TOTAL LIABILITIES AND SHAREHOLDERS EQUTIY
48 910
21 400 13 376
8 024
8 024 56 934
700
4 000
4 000 4 700
Session 1, 2011
AFM1A
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