Question

Question 9 Chee Yong Chaw began his business on 1 July 2016. The business balances its books at month-end and uses special journals and the periodic inventory system. Transactions for July 2016 were as follows: July 1 Chee Yong Chaw invested $26,640 cash and $15,540 office equipment into the business. July 2 Purchased inventory from L Cao on account for $6,660 plus GST; terms 2/15, n/30. Paid July rental of $2,660 plus GST; by interbank transfer to Prime Properties Ltd. July 3 Purchased inventory from Difabio Ltd on account for $5,400 plus GST; terms n/30. July 6 Sold inventory to J Ellis on account for $1,480 plus GST; terms 2/15, n/30. July 7 Received July rental of $670 plus GST for space sublet to Perth Services. July 8 Purchased stationery supplies for $1,480 plus GST; cheque no. 124. July 10 Purchased inventory for cash $1,470 plus GST. July 13 Sold inventory to Giola Ltd on account for $3,330 plus GST; terms 2/10, n/30. July 14 Purchased inventory from O Hee on account for $4,440 plus GST; terms 2/10, n/30. July 15 Paid L Cao for 2 July purchase with an interbank transfer. July 19 Received $1,595 from J Ellis in payment of her account. Sold inventory to O Kaddish on account for $3,400 plus GST; terms 2/10, n/30. July 21 Received $3,590 from Giola Ltd in payment of its account. Sold inventory to Modra Ltd on account for $2,660 plus GST; terms 2/10, n/30. July 22 Paid O Hee for 14 July purchase; cheque no. 125. July 23 Purchased inventory from L Cao on account for $4,070 plus GST; terms 2/15, n/30. July 26 Sold inventory for cash, $2,150 plus GST. July 28 Returned defective inventory that cost $890 to L Cao. July 29 Sold merchandise to I Nizic on account for $6,070 plus GST; terms 2/10, n/30. July 30 Purchased merchandise from A Romeo on account for $1,330 plus GST; terms 1/10, n/30. Paid month's salary of office assistant, $2,370 by interbank transfer.

Prepare journal entries for July 2016, using appropriate journals. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Answer 1

Journal entry

Date. Particulars Debit($) Credit ($)

July1 Cash 26640

Office equipment 15540

To Capital. 42180

(being capital invested)

July2 Purchase 6660

To Account payable. 6660

(being purchase on account)

July2 Rent expenses 2660

To Bank. 2660

(being rent paid)

July3 Purchase 5400

To Account payable 5400

(being purchase on account  

July6 Account receivable 1480

To Sales. 1480

(being sales on account)

July7 Cash 670

To Rental Income 670

(being rental. Income received)

July8 Supplies 1480

To Bank 1480

(being supplies purchase)

July10 Purchase 1470

To Cash 1470

(being purchase made)

July13. Account receivable 3330

To Sales 3330

(being sales on account)

July14 Purchase 4440

To Account payable 4440

(being purchase made)

July15. Account payable 6660

To Bank 6660

(being payment made)

July19. Cash 1595

To Account receivable 1480

To Interest 115

(being payment received)

July19 Account receivable 3400

To Sales. 3400

(being sales made on account)

July21 Cash 3590

To Account receivable 3330

To Interest 260

(being payment received)

July21 Account receivable 2660

To Sales. 2660

(being sales made on account)

July22 Account payable 4440

To Bank. 4440

(being payment made)

July23. Purchase 4070

To Account payable 4070

(being payment made)

July26. Cash 2150

To Sales 2150

(being sales made)

July28 Account payable 890

To Purchase return. 890

(being goods return)

July29. Account receivable 6070

To Sales. 6070

(being sales made on account)

July30. Purchase 1330

To Account payable 1330

(being purchase made on account)

July 30 Salary. 2370

To Bank. 2370

(being salary paid)