Question

The Bambi Company commenced operations inDecember and records its operations in a single ledger.

The following information relates to its production for the month:

Raw material purchased on credit (including 10% GST)	$22,000
Raw material issued to production	$15,000
Raw material issued as factory supplies	$2,000
Direct labour charged to production	$17,000
Indirect labour	$2,000
Factory labour payroll paid (net of PAYG Withheld of $3,000)	$16,000
Factory rent paid excluding 10% GST	$8,500
Depreciation on factory machinery	$7,500
Factory Overhead charged to production	$20,000
Cost of Goods Manufactured sent to finished goods store	$32,000
Goods sold on credit:     Sales price (excluding 10% GST) Cost price of Goods Sold on credit	$30,000 $22,000

Required:

Prepare the general journal entries to record the above transactions that took place during December.

Answer 1

Journal entries in the books of Bambi company

Raw material a/c..........................dr 20000

Gst paid a/c..................................dr 2000

To cash a/c. 22000

(Being the the raw materials purchased )

Factory labour payroll expenses a/c......dr 16000

To cash. 16000

(Being the payroll expense paid)

Factory rent a/c...............................dr 7728

Gst paid a/c.....................................dr 772

To cash a/c 8500

(Being factory rent paid)

Depreciation a/c..............................dr 7500

To factory machinery 7500

(Being the factory machinery was depreciated)

Sales a/c........................................dr 30000

Gst a/c...........................................dr 3000

To cash a/c. 33000

(Being the sales are done and recorded in the books of accounts)

These are all the journal entries required to solve the given question.

I hope, all the above given journal entries and calculations are useful and helpful to you.

Thank you.