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                                                               .

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.
TRIAL BALANCE AS AT 1 SEPTEMBER 2015
ACCOUNT D
EBIT $ CREDIT $

2. 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

3. 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 30
0
Rent
expense 12,0
00
Telephone
expense 400
Wagesexpense
3,000
TOTAL
$

4. 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:

5. 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 repayment and $1,000 accounts for interest expense.
CENTRALITY BANKING CORPORATION
Statement of Account for
:
BENCHTOP STOVES R.US.

6. 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
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

7. 48,000
8,400
30,640
30,440
30,140
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.

8. 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.
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.

9. 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.
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.

10. 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.
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

11. and the Delux Benchtop Stoves.
Bank Reconciliation Statement as at 30 SEPTEMBER 2015.
Unadjusted Trial Balance, Adjusted Trial Balance, and Post
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.

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

13. 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
7
UNADJUSTED TRIAL BALANCE
24
ADJUSTED TRIAL BALANCE

14. 8
POST CLOSING TRIAL BALANCE
3
INCOME STATEMENT
10
BALANCE SHEET
10
TOTAL
220

15. FINAL GRADE 20%