BENCHTOP STOVES R.US. 508 Darling St., Moonee Ponds VIC. 3039 TIM TIDY, a semi-retired cleaner started a retail business on 1 July 2015, supplying two grades Bench top stoves for office cleaning purposes. They are A1. BENCHTOP STOVES and DELUX BENCHTOP STOVES . As most of his customers are city offices, Tim is not required to provide delivery services. Therefore, he did not have to invest in motor vehicles. Instead, she invested in equipment for servicing the bench top stoves by paying $20,000 cash on the day of commencement of business. Tim sees great potential in this business and endeavours to maintain double entry accounting records. It has been two months since the start of business and now, he has engaged your service as an accountant to develop the double entry recording system. As there are small expenses paid directly by Tim, you recommended a Petty Cash Advance be established and a Petty Cash Book maintained. The trial balance below shows the summary of transactions in the first two months of business, now carried forward to the 1 st of SEPTEMBER 2015. BENCHTOP STOVES R.US. TRIAL BALANCE AS AT 1 SEPTEMBER 2015 ACCOUNT DEBIT $ CREDIT $ Cash at bank 30,640 Accounts Receivable 93,000 Inventory A1. Benchtop Stoves 30,000 Delux Benchtop Stoves 10,000 Equipment (paid cash on 1 July 2015) 20,000 Accounts Payable 50,000 Loan from Sunny Bank Ltd 83,340 Capital – TIM TIDY 40,000 Drawings – TIM TIDY 10,000 Sales 132,000 Cost of Sales – A1. Benchtop Stoves 60,000 Cost of Sales – Delux Benchtop Stoves 30,000 Electricity expense 3,000 Equipment Running Costs 400 Insurance expense – Equipment 600 Interest expense 2,000 Office Supplies 300 Rent expense 12,000 Telephone expense 400 Wagesexpense 3,000 TOTAL $ 305,340 $ 305,340 Information relating to opening trial balance: 1. The Purchases and Sales history for the past two months is as follows: Purchases Sales A1. BENCHTOP STOVES 150 @ $600 each 100 @ $900 each DELUX BENCHTOP STOVES 40 @ $1,000 each 30 @ $1,400 each NOTE : Purchases and Sales are a combination of cash and credit transactions. Inventory balances as at 1 st September: A1. BENCHTOP STOVES 50 @ $600 each DELUX BENCHTOP STOVES 10 @ $1,000 each Cost of Sales for two months ending 31 st August 2015 A1. BENCHTOP STOVES 100 @ $600 each DELUX BENCHTOP STOVES 30 @ $1,000 each 2. FIFO method of accounting for inventory is used. 3. Accounts Receivable as at 1 SEPTEMBER 2015 consisted of: Top Shelf Ltd $45,000 Real Deal Ltd $48,000 4. Accounts Payable as at 1 SEPTEMBER 2015 consisted of: Keener Prices Ltd $50,000 5. Loan from Centrality Banking Corp. for the amount of $100,000 was effective from 1 July 2015. Interest rate of 12% per annum applies. An amount of $9,330 per month is payable on the last day of each month, of which, $8,330 accounts for loan repaym.

1. BENCHTOP STOVES R.US.
508 Darling St., Moonee Ponds VIC. 3039
TIM TIDY, a semi-retired cleaner started a retail business on 1
July 2015, supplying two grades Bench top stoves for office
cleaning purposes. They are A1.
BENCHTOP STOVES and DELUX
BENCHTOP STOVES . As most of his customers are city
offices, Tim is not required to provide delivery services.
Therefore, he did not have to invest in motor vehicles. Instead,
she invested in equipment for servicing the bench top stoves by
paying $20,000 cash on the day of commencement of business.
Tim sees great potential in this business and endeavours to
maintain double entry accounting records. It has been two
months since the start of business and now, he has engaged your
service as an accountant to develop the double entry recording
system.
As there are small expenses paid directly by Tim, you
recommended a Petty Cash Advance be established and a Petty
Cash Book maintained.
The trial balance below shows the summary of transactions in
the first two months of business, now carried forward to the 1
st
of SEPTEMBER 2015.
BENCHTOP STOVES R.US.

2. TRIAL BALANCE AS AT 1 SEPTEMBER 2015
ACCOUNT
DEBIT $
CREDIT $
Cash at bank
30,640
Accounts Receivable
93,000
Inventory
A1.
Benchtop Stoves
30,000
Delux Benchtop Stoves
10,000
Equipment (paid cash on 1 July 2015)
20,000

3. Accounts Payable
50,000
Loan from Sunny Bank Ltd
83,340
Capital – TIM TIDY
40,000
Drawings –
TIM TIDY

4. 10,000
Sales
132,000
Cost of Sales – A1. Benchtop Stoves
60,000
Cost of Sales – Delux Benchtop Stoves
30,000
Electricity expense
3,000

5. Equipment Running Costs
400
Insurance expense – Equipment
600
Interest
expense
2,000
Office Supplies
300
Rent expense
12,000

6. Telephone expense
400
Wagesexpense
3,000
TOTAL
$
305,340
$
305,340

7. Information relating to opening trial balance:
1.
The Purchases and Sales history for the past two months is as
follows:
Purchases
Sales
A1. BENCHTOP STOVES
150 @ $600 each
100 @ $900 each
DELUX BENCHTOP STOVES 40 @ $1,000 each
30 @ $1,400 each
NOTE
: Purchases and Sales are a combination of cash and credit
transactions.
Inventory balances as at 1
st
September:

8. A1. BENCHTOP STOVES
50 @ $600 each
DELUX BENCHTOP STOVES
10 @ $1,000 each
Cost of Sales for two months ending 31
st
August 2015
A1. BENCHTOP STOVES 100 @ $600 each
DELUX BENCHTOP STOVES
30 @ $1,000 each
2. FIFO method of accounting for inventory is used.
3.
Accounts Receivable as at 1 SEPTEMBER 2015 consisted of:
Top Shelf Ltd
$45,000
Real Deal Ltd
$48,000
4.

9. Accounts Payable as at 1 SEPTEMBER 2015 consisted of:
Keener Prices Ltd
$50,000
5.
Loan from Centrality Banking Corp. for the amount of $100,000
was effective from 1 July 2015. Interest rate of 12% per annum
applies. An amount of $9,330 per month is payable on the last
day of each month, of which, $8,330 accounts for loan
repayment and $1,000 accounts for interest expense.
CENTRALITY BANKING CORPORATION
Statement of Account for
:
BENCHTOP STOVES R.US.
508 Darling St., Moonee Ponds VIC. 3039
Moonee Ponds, Victoria
SEPTEMBER 2015 Statement
Particulars
Debit $
Credit $
Balance $
1 SEPTEMBER Open. Balance
1 SEPTEMBER Cheque No. 119

10. 6 SEPTEMBER Cheque No.120
12
SEPTEMBER C&C
16 SEPTEMBER Cheque No. 122
17 SEPTEMBER C&C
18 SEPTEMBER Cheque No. 121
20 SEPTEMBER Cheque No. 124
26 SEPTEMBER Cheque No. 126
28 SEPTEMBER Cheque
No.123
29 SEPTEMBER Cheque No.128
30 SEPTEMBER Bank Fees
200
300
1000
50,000
1,000
170
300
1,000
30
48,000
8,400
30,640
30,440
30,140

11. 78,140
77,140
85,540
35,540
34,450
34,370
34,070
33,070
33,040
Date of Issue: 30 SEPTEMBER 2015
TRANSACTIONS FOR THE MONTH OF SEPTEMBER 2015
1 SEPTEMBER
Drew Cheque no. 119 to establish Petty Cash Advance of $200.
1 SEPTEMBER
Paid Insurance on Equipment by Cheque no. 120 for the amount
of $300.
2 SEPTEMBER
Purchased 100 A1. Benchtop Stoves on credit from Keener
Prices Ltd at $660 each – Invoice no. 16110.
4 SEPTEMBER
Returned 2 defective A1. Benchtop Stoves that were purchased
from Keener Prices Ltd on 2nd of SEPTEMBER 2015.
5 SEPTEMBER
Received $48,000 from customer, Real Deal Ltd – Receipt
No.12 was issued.

12. 8 SEPTEMBER
Sold 80 A1. Benchtop Stoves @ $900 each to Sally Ltd on
credit – Invoice No 10003.
9 SEPTEMBER
Paid $50 for plastic covers from petty cash – voucher no. 1 was
raised.
10 SEPTEMBER
Sold 6 Delux Benchtop Stoves for $8,400 to customer, Handy
Andy
Ltd who paid cash, online, direct into bank account. Receipt no.
13 was issued.
11 SEPTEMBER
Paid supplier Keener Prices Ltd by Cheque no. 121 for the
amount of $50,000.
13 SEPTEMBER
Paid $120 for signage from petty cash – voucher no. 2 was
raised.
15 SEPTEMBER
Paid wages by Cheque no. 122 for the amount of $1,000.
18 SEPTEMBER
Paid Electricity account by Cheque no. 123 for the amount of
$300.
20 SEPTEMBER
Tim Tidy, the owner withdrew $1,000 for personal use by
Cheque no. 124.
21 SEPTEMBER
Purchase 20 Delux Benchtop Stoves from a new supplier –
Happy Customers Ltd, for $990 each.
23 SEPTEMBER
Sold 8 Delux Benchtop Stoves to a new customer – Heady
Prices Ltd for $1,450.00 each, Invoice No 1004.
Paid $170 to Real Oils by Cheque No. 125 for lubricating oil for
equipment.
26 SEPTEMBER
Reimbursed petty cash with Cheque no. 126.

13. 27 SEPTEMBER
Paid $240 to Voda by Cheque No.127 for telephone services.
Purchase 4 A1Benchtop Stoves from Heady Prices Ltd for
$610 each
28 SEPTEMBER
Paid wages by Cheque no. 128 for the amount of $1,000.
29 SEPTEMBER
Received $44,100 from customer, Top Shelf Ltd and 2%
discount was allowed for early payment – Receipt No. 14 was
issued.
29 SEPTEMBER
Paid Rent for October with Cheque no. 129 for the amount of
$4,000. Using the asset method
ADDITIONAL INFORMATION AS AT 30 SEPTEMBER 2015
Equipment is to be depreciated on a reducing balance at 12%
per annum.
Repayment of Loan from Centrality Banking Corp for the month
of SEPTEMBER 2015 is yet to be paid.
Rent for the amount of $4,000 was paid in advance for the
month of October 2015, using a Prepaid Rent account.

14. Employees are owed wages of $300:00 on balance day.
A physical stock take as at 30
th
September 2015 revealed:
17 A1 Benchtop Stoves and
13 Delux Benchtop Stoves.
STUDENTS ARE ALLOWED TO USE MS EXCEL
SPREADSHEETS OR MS WORD
OR MYOB OR ANY OTHER SUITABLE COMPUTERISED
PROGRAM TO PREPARE THE FOLLOWING:
General and Special Journals to record:
Opening balances, all transactions for the month of
SEPTEMBER 2015, all balance day adjustments, closing entries
and reversing entries as required.
Post all Journals to General Ledgers and Subsidiary Ledgers for
Accounts Payable and Accounts Receivable.
Post transactions to the Inventory Cards for A1 Benchtop Stoves
and the Delux Benchtop Stoves.
Bank Reconciliation Statement as at 30 SEPTEMBER 2015.
Unadjusted Trial Balance, Adjusted Trial Balance, and Post

15. Closing Trial Balance as at 30 SEPTEMBER 2015.
An Income for the three months ended 30 SEPTEMBER 2015
and Balance Sheet as at 30 SEPTEMBER 2015.
BENCHTOP STOVES R.US..
MARKING SCHEME
STUDENTS ARE NOT PENALISED FOR SUBSEQUENT
ERRORS.
THAT IS WHY THE MARKS FOR THE JOURNALS ARE SO
HIGH.

16. JOURNALS
CASH RECEIPTS JOURNAL
8
CASH PAYMENTS JOURNALS
25
GENERAL JOURNALS
46
SALES JOURNALS
3
PURCHASES JOURNALS

17. 3
PURCHASES RETURNS JOURNALS
3
PETTY CASH BOOK
6
INVENTORY CARDS.
SUBSIDIARY ACC. RECEIVABLE LED. AND REPORT
20
8
SUBSIDIARY ACC. PAYABLE LED. AND REPORT
7
GENERAL LEDGER
29
BANK RECONCILITATION

18. 7
UNADJUSTED TRIAL BALANCE
24
ADJUSTED TRIAL BALANCE
8
POST CLOSING TRIAL BALANCE
3
INCOME STATEMENT
10
BALANCE SHEET
10
TOTAL

19. 220
FINAL GRADE 20%