Reference no: EM132461521
Problem - Tom Jackson opened a new real estate agent business on 1 May 2019, called Elite Real Estate. Tom operates the business as a sole-trader. The business will specialise in selling luxury properties on the Central Coast, in New South Wales.
During the first two months of operations, the following transactions occurred:
Date Detail
1 May Tom Jackson contributed $30,000 of personal funds into the business bank account.
1 May Elite Real Estate rented a retail premises for the business in Terrigal, New South Wales, for a period of 6 months (1 May - 31 October 2019). Rent for the 6 month term amounted to $12,000, and Elite Real Estate paid the $12,000 to the landlord from the business bank account.
1 May Elite Real Estate purchased a motor vehicle for the business. The motor vehicle cost $23,000, The business borrowed $20,000 from the bank, and paid the remaining $3,000 from the business bank account.
1 May Elite Real Estate paid $680 to NRMA (from the business bank account), for motor vehicle insurance for the period 1 May 2019 - 30 April 2020.
1 May Elite Real Estate purchased a computer and printer for the business. The computer cost $2,400 and the printer cost $1,300. The business paid for these items from the business bank account.
5 May Elite Real Estate organised for advertising flyers to be printed by a local printery, and Tom Jackson delivered the flyers to house letterboxes on the Central Coast. Elite Real Estate received an invoice for the flyers, with an amount due of $1,800. The invoice is due for payment on 5 July 2019. After delivering all of the flyers, Elite Real Estate was successful in gaining contracts to sell a number of houses on behalf of clients.
31 May Elite Real Estate received an invoice from realestate.com.au and an invoice from domain.com.au for advertising costs for the month of May, for $440 and $500 respectively. Both invoices are due for payment on 14 June 2019.
31 May Interest of $90 is charged on the bank loan.
1 Jun Elite Real Estate paid $3,600 for business insurance (from the business bank account), for the period 1 June 2019 - 31 May 2020.
10 Jun Elite Real Estate paid the May invoices for realestate.com.au ($440) and domain.com.au ($500) from the business bank account.
15 Jun Elite Real Estate sold its first house in Terrigal, New South Wales on behalf of a client. The commission earned on the sale was $25,000, and the money was deposited into the business bank account.
16 Jun Tom Jackson withdrew $3,000 from the bank account for personal expenses.
18 Jun Elite Real Estate purchased fuel for the business vehicle, for $78, paid from the bank account.
25 Jun Elite Real Estate paid wages of $600 to an employee (from the business bank account), who was employed to assist with reception and administration duties of the business.
30 Jun Interest of $92 is charged on the bank loan.
30 Jun Elite Real Estate paid $3,000 off the bank loan (paid from the business bank account).
30 Jun Elite Real Estate received an invoice from realestate.com.au and domain.com.au for advertising costs for the month of June, for $500 and $600 respectively. Both invoices are due for payment on 14 July 2019.
30 Jun Elite Real Estate received an invoice from Telstra, for May and June telephone, for $290. The due date for payment is 20 July 2019.
Additional information as at 30 June 2019:
Depreciation to be recognised for May and June is $500 for the motor vehicle, $50 for the computer, and $40 for the printer.
Elite Real Estate owes wages of $300 to the employee of the business, for services to 30 June.
In relation to the bank loan, $8,000 is repayable within 12 months and needs to be recognised as a current liability. The balance of the loan needs to be recognised as a non-current liability.
Ignore any GST.
Required -
1. Prepare journal entries for May and June 2019 transactions listed above (including any adjusting entries). Include dates, references and narrations.
2. Prepare T-accounts in an Excel spreadsheet. Post all of the above journal entries to the T-accounts. Include dates and references for each entry. Total all of the T-accounts to determine their balances at the end of June 2019.
3. Prepare the 'Adjusted Trial Balance' in an Excel spreadsheet as at 30 June 2019. Use formulas to generate all of the figures in the 'Adjusted Trial Balance' from the balances in the T-Accounts.
4. Prepare the income statement, balance sheet, and statement of changes in equity in Excel. Use formulas to generate all of the figures in the financial statement reports from the 'Adjusted Trial Balance'.