Question

On 1 July 2019 Nicole Andreou opened a beauty parlour. The following transactions occurred during the first month of operations: July Andreou invested $120 000 in the business by depositing cash into a business cheque account with the Eastpac Bank. Paid $1800 for the first month's rent plus GST. Purchased equipment for $70 000 by an online bank transfer for $32 000 and signing a commercial loan agreement for $45 000. Purchased supplies for $8400, plus GST. Paid advertising expense of $890, plus GST. Recorded beauty services revenue for the first half of the month of $3575 in cash and $682 on credit. Paid insurance expense for July of $480, plus GST, using an online bank transfer. Received a $154 payment from customers who paid on credit in the first half of the month. Andreou withdrew $560 cash for personal living expenses. Recorded revenue for the second half of the month of $4048 in cash and S638 on credit. Paid telephone account of $330, including GST, by electronic transfer. 31 Use the following account titles and numbers: Cash at Bank, 100; Accounts Receivable, 101; Supplies, 102; Equipment, 103; GST Receivable, 104; Loan Payable, 200; GST Payable, 201; Nicole Andreou, Capital, 300; Nicole Andreou, Drawings, 301; Revenue, 400; Rent Expense, 500; Advertising Expense, 501; Insurance Expense, 502: Telephone Expense, 503.

Answer 1

Solution as per below Images:

Workin Note: Journal entries GST rate was assumed to be 10% Journal Entries Amount In $ Cr Amount Particulars Cash at Bank(100) To Nicole Andrew Capital Account (300) Dr Amount 120000 120000 Rent Expenses(500) GST Receivables(104) To Cash at Bank(100) 1800 180 1980 70000 7000 Equipment(103) GST Receivables(104) To Cash at Bank(100) To Loan Payable(200) 32000 45000 Supplies (102) GST Receivables(104) To Cash at Bank(100) 8400 840 9240 Advertisement Expense(501) GST Receivables(104) To Cash at Bank(100) 979 3575 682 Cash at Bank(100) Accounts Receivables (101) To Revenue (400) To Gst Payable(201) 3870 387 Insurance Expense(502) GST Receivables(104) To Cash at Bank(100) Cash at Bank(100) To Accounts Receivables (101) 560 Drawings(301) To Cash at Bank(100) 560 4048 638 Cash at Bank(100) Accounts Receivables (101) To Revenue (400) To Gst Payable(201) 4260 426 Telephone Expense(503) GST Receivables(104) To Cash at Bank(100) 330

Balance Sheet as at 31 July 2019 Capital and Liabilities Amount in s Assets Amount in $ Equipment(103) 70000 Nicole Andrew Capital Account (300) Less: Drawings(301) Less: Loss Net Capital 120000 -560 -3740 115700 Accounts Receivables (101) 1166 GST Receivables (104) 8187 Loan Payable(200) 45000 Cash at Bank(100) 82160 Gst Payable(201) 813 Total 161513 Total 161513 Income Statement for the year ended on July 31, 2019 Particulars Amount in $ Revenue 8130 Less: Cost of Supplies 8400 Income From Operation -270 Expenses: Rent Expense 1800 Advertisement Expense 890 Insurance Expense 480 Telephone Expense 300 Total Expenses 3470 Net Loss -3740