Granite Bay Jet Ski, Incorporated Level I 5 th Edition Transactions For June 24-30 Page 1
Heads Up: In this module you will be required to record (1) payment of a cash dividend, (2) replenish the petty cash fund, and (3) journal entries for a bank reconciliation. TRANSACTIONS FOR JUNE 24-30 June 24 Sold a Kawasaki Jet Ski and a deluxe trailer to customer Deborah Rowley. Sales invoice number G6049 shows the total sales price including tax to be $10,328.71. The cost of the merchandise sold in this transaction totals $6,895.00. Deborah paid $5,328.71 as a cash down payment and Granite Bay Jet Ski accepted a short-term, 8%, note receivable for the balance. Student Analysis June 24 Issued check 30429 for $178.50 to Shasta Computer Service for service work on the business computer system. The invoice on this service work was Sl990. The Professional Services Expense account is debited for this service work. June 24 Received a $100.00 check from the Folsom Lake Skimmers as payment in full on their past-due account receivable balance. (Invoice number G5815) June 24 Sold parts and accessories to customer Reggie Denver for $364.00 and charged Mr. Denver for 2.25 hours of labor on his Jet Ski and trailer. The sales invoice number is G6050 and the customer paid for his merchandise and service with a Western National credit card. The accessories sold in this transaction cost $260.00. June 24 Issued check 30430 to Alfredo's Supply as payment in full of invoice number A2798. The invoice balance is $164.30 less the $28.50 adjustment for the return of supplies on June 16. The Page 2
Alfredo's Supply cash terms are net 10. Page 3
TRANSACTIONS FOR JUNE 24-30 June 25 Received a check for $120.00 from customer Beverly Kyle as a partial payment on her past-due account balance (sales invoice number G5955). Student Analysis June 25 Issued check number 30431 for $3,600.00 as payment of the dividends declared to common stockholders on June 6. At the invoice prompt enter DIVPD for dividends paid. June 26 Repaired hull damage and replaced an impeller for customer Derek Mertz. Derek was charged $767.20 for parts and accessories, $65.00 per hour for 3.5 hours of labor, and sales tax on the invoice total (sales invoice number G6051). The bill was paid with a bank credit card. The accessories sold in this transaction cost $548.00. June 26 Purchased additional store fixtures for better display of our new Kawasaki Jet Skis and accessories and issued check 30432 for $2,750.00 as payment in full to Eureka Business Equipment Company. The invoice number for this transaction is EE444. June 26 Issued check number 30433 for $1,265.00 to Reed, Rasmussen, and Redding, of RRR Insurance, Incorporated for additional liability and inventory insurance for the business. The invoice number for the insurance is 68686. Page 4
TRANSACTIONS FOR JUNE 24-30 June 27 Received a check for $10,294.93, from the Western National Credit Card Company, as payment in full on credit card invoices that had been received thru June 20 and mailed to the credit card company. The invoices totaled $10,613.33 and the credit card company charged a 3% fee for the use of their system. The summary invoice number for these invoices is CC696. Student Analysis June 27 Through a telephone order, sold to the Ophir Hill Ski Club, the last Kawasaki 900 STX Jet Ski in stock for an OTD price of $7,190.40 (sales tax included). The purchase was charged to the club account (sales invoice number G6052). Granite Bay will deliver this Jet Ski without charge. June 28 The Beal's Point Ski Club used a bank credit card to pay storage fees of $825.00 for the six-month period beginning July 1 and to purchase parts and accessories for $330.00 (sales invoice number G6053). Remember that sales tax is not charged on storage fees. June 28 Purchased at cost, for $375.00 cash (check number 30434), a "Flame-Out" Pipe from Rocklin Jet Ski, our competition on Taylor Road in Rocklin. At the invoice prompt enter RJSKI for Rocklin Jet Ski. Owner-General Manager Bill Crichton, and Parts Manager Paul Jackson, have always been very generous in helping Granite Bay Jet Ski with any "out-of-stock" situation. Rocklin Jet Ski is one of the top Kawasaki dealers in the area and is unsurpassed in providing quality professional repairs and performance work. Page 5
TRANSACTIONS FOR JUNE 24-30 June 28 Granite Bay Jet Ski maintains an active account with Larson Brothers, Inc., a local and interstate transportation company. Received invoice L3598 for $65.50, the shipping costs to transport the Kawasaki 900 STX Jet Ski to the telephone customer (Ophir Hill Ski Club) of June 27. Student Analysis June 28 Issued check 30435 to Clear Water, Incorporated as payment in full of invoice C3754 of June 18. Clear Water extends cash terms of 2/10, n/30. Carefully check the June 18 invoice and remember that discounts are not taken on freight charges. June 29 Issued check 30436 to the State Board of Equalization for the balance of sales tax collected through the close of the work day on June 23. Check the ledger card or the "Check It Out" box for the balance in the account on this date. At the invoice prompt enter SALTX for sales tax. June 29 Billed customer Kerry Jenson for 3.6 hours of labor for repairing damage to her racing Jet Ski. The sales invoice number is G6054. Page 6
TRANSACTIONS FOR JUNE 24-30 June 30 Issued check 30437 for $60.60 to replenish the Petty Cash Fund. A total of $39.40 remains in the petty cash box at this time. A summary of receipts (summary invoice PC143) shows the following expenditures have been made to date from Petty Cash: Student Analysis Store & Shop Supplies Expense $37.50 Tools Expense 22.10 Be sure to account for the overage or shortage in the petty cash fund. June 30 Purchased five Clear Water Sprint watercraft and watercraft accessories from Clear Water, Incorporated, of Alameda. The purchase invoice (C3900) totals $23,988, and lists terms of 2/10, n/30, and FOB destination shipping terms. June 30 Issued check number 30438 to Matt Burman, the part-time sales and repair person for the business. Matt is paid $12.50 per hour and worked 30.5 hours during the past two-week pay period which ended June 28. At the invoice prompt enter PAYRL for payroll. June 30 Issued check 30439 for $850.00 to the Krichtun Advertising Agency for advertising copy that will run over the next two weeks in the local media (invoice number K2222). June 30 Sold two Trail-Swift trailers, plus accessories, to the Rocklin Jetters for $2,696.40, which includes sales tax. Received a cash payment of $1,000.00 and the balance was charged to the club account (sales invoice number G6055). Page 7
When you have entered all of the regular transactions for the final period in June, print a trial balance or call the trial balance to the screen and check your account totals against the "Check It Out" block on page 8. If all of your totals match the check figures, you are ready to proceed to the bank reconciliation. If any of your account balances do not agree with the check figures, apply the necessary audit procedures used in this accounting system and make the necessary correction/s. Remember that the most efficient way to locate errors is to print a copy of the General Journal and the Trial Balance. When the account balances match the "Check It Out" block, save your data for module four, and proceed to the bank reconciliation. CHECK IT OUT 101 Cash $22,220.83 105 Accounts Receivable 71,909.43 107 Accounts Rec., Cr. Card Companies 545.97 109 Notes Receivable 6,000.00 115 Merchandise Inventory 135,197.85 121 Prepaid Insurance 6,230.00 125 Prepaid Advertising 0.00 131 Store Equipment and Fixtures 55,898.00 201 Accounts Payable 48,621.00 205 Sales Tax Payable 1,467.34 221 Unearned Storage Fees 13,685.00 218 Dividends Payable 0.00 402 Sales Returns and Allowances 2,238.00 411 Service Fees Earned 9,820.25 501 Cost of Merchandise Sold 244,075.56 505 Transpiration-In 1,501.75 601 Salaries & Wages Expense 2,690.50 602 Store & Shop Supplies Expense 3,793.66 606 Delivery Expense 661.50 607 Credit Card Expense 1,061.50 628 Cash Short & Over 11.25 629 Miscellaneous Expense 19.81 TRIAL BALANCE TOTAL $633,202.05 Page 8
BANK RECONCILIATION BEFORE ENTERING THE ADJUSTING ENTRIES, complete the bank reconciliation for June 30, the statement date and the last workday of the month. Enter the cash balance from the trial balance as the book balance and $33,013.17 as the bank statement balance. Additional information needed to complete the reconciliation is listed below: 1. A late deposit of $1,000.00 was not listed on the bank statement. 2. Interest earned on the checking account totals $76.14. 3. The bank charge for check printing (Bank Service Charges) totals $50.50. 4. Checks 30436, 30438, and 30439 were not returned with the bank statement. 5. A NSF check for $120.00 has been returned by the bank. The check was received from Beverly Kyle on June 25 as a partial payment. No additional handling charge has been added by the bank or Granite Bay Jet Ski. At the invoice prompt enter BKR06 for bank reconciliation 6. During the month of June, customers purchased $20,837.93 in merchandise and services using their bank credit cards. The bank statement lists a debit memo that charges Granite Bay Jet Ski 3% of the total of these sales receipts as a credit card fee (Credit Card Expense). At the invoice prompt enter BKR06. Using the Daily Entries option, journalize the required transactions resulting from the bank reconciliation. Since some entries are updating the balance of the cash account and no check is being issued, when the system asks for a check number, enter BKR06. When an invoice number for any bank reconciliation entry (such as NSF check, credit card expense, bank service charges, or interest earned) is requested, enter BKR06. The bank reconciliation entries may be entered individually or as a compound entry or entries. ************************ When your Bank Reconciliation entries have been entered, print a copy of the Trial Balance! THIS IS THE TRIAL BALANCE THAT WILL BE USED WHEN RECORDING THE ADJUSTING ENTRIES FOR THE BUSINESS! Check your trial balance against the final check figures below. The new, after bank reconciliation, June 30, Trial Balance check figure is $633,278.19 and the Cash account balance is $21,501.33. The balance of the Bank Service Charges account is now $133.25, the Credit Card Expense account balance is $1,686.64, and the Interest Earned account has a new total of $721.64. When your balances match these figures, you are ready to record the adjusting entries for the quarter ended on June 30. Page 9
BANK RECONCILIATION GRANITE BAY JET SKI INCORPORATED NAME SECTION DATE Book Balance: BANK RECONCILIATION GRANITE BAY JET SKI INCORPORATED JUNE 30 Add: $ Total $ Deduct: $ $ $ $ Reconciled Book Balance $ ============== Bank Balance: $ Add: $ Total $ Deduct: Check No. $ Check No. $ Check No. $ $ Reconciled Bank Balance $ ============== Page 10