VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.

1. 7.6
SITUATION #3: NON-CASH
CONTRIBUTIONS AND
DRAWINGS

2. © Michael Allison. Author’s permission required for external use.
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS
BusinessOwner
Owner contributes cash
to the business…
Cash Receipts JournalCash Payments Journal
Owner withdraws cash
from the business…
Capital contributionDrawings

3. © Michael Allison. Author’s permission required for external use.
 But capital contributions and drawings can be non-cash items…
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS
BusinessOwner

4. © Michael Allison. Author’s permission required for external use.
 July 1 – the owner contributed an office desk to the business with an
agreed value of $200.
BusinessOwner
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS

5. © Michael Allison. Author’s permission required for external use.
 The entry in the General Journal is then posted directly to the General Ledger
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
Office Furniture [A]
31/7 Capital 200
Entered on
actual day of
transaction
Posted on last day
of period
Capital [OE]
30/6 Capital 200 31/7 Office furniture 200
Posted on last day
of period
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS
Debit Credit
Assets  
Debit Credit
Owner’s Equity  
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
Office Furniture [A]
31/7 Capital 200
Debit Credit
Assets  
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 1 Office furniture [A] 200
Capital [OE] 200
Owner contributed office
desk to business (Memo 1)
Capital [OE]
30/6 Capital 200 31/7 Office furniture 200
Debit Credit
Owner’s Equity  

6. © Michael Allison. Author’s permission required for external use.
 July 2 – the owner withdrew stock with a value of $100 (plus $10
GST) for personal use
BusinessOwner
The cost price of
$100?
The GST
inclusive amount
of $110?
or
Should the stock be recorded at…
Withdrawals of assets by
the owner do NOT include
GST
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS

7. © Michael Allison. Author’s permission required for external use.
 But there will be times when the owner contributes or withdraws non-cash
items, e.g.
 July 2 – the owner withdrew stock with a value of $100 (plus $10 GST) for
personal use
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS

8. © Michael Allison. Author’s permission required for external use.
 The entry in the General Journal is then posted directly to the General Ledger
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
Drawings [-OE]
31/7 Stock 100
Entered on
actual day of
transaction
Posted on last day
of period
Stock [A]
30/6 Capital 200 31/7 Drawings 100
Posted on last day
of period
7.6 SITUATION #3
NON-CASH CONTRIBUTIONS AND DRAWINGS
Debit Credit
Negative OE  
Debit Credit
Assets  
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
Drawings [-OE]
31/7 Stock 100
Debit Credit
Negative OE  
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jul 2 Drawings [-OE] 100
Stock [A] 100
Owner withdrew stock for
personal use (Memo 1)
Stock [A]
30/6 Capital 200 31/7 Drawings 100
Debit Credit
Assets  

9. © Michael Allison. Author’s permission required for external use.
TASK
In-class Homework
Ex7.6 X