Chapter 7 Activities

ACTIVITY 1

The following remittance list has been prepared showing receipts for 1 June:

Customer name	Account number	Amount received $
A C Bhatt	1037	265.40
Flowers Limited	1002	319.64
E Murphy	1053	396.61
P Taylor	1025	236.98
F Willis	1129	326.89
Young Fashions	1042	115.79
Perry & Co	1079	163.26
L Connor Limited	1023	115.37
O McGovern	1152	327.36
J Shepard	1116	372.45
Cole and Porter	1014	325.67
P Smith	1046	235.89
D Smith	1103	117.80

The summary information from the cash register printout for 1 June was as follows:

Totals	$
Cash	1,151.50
Cheques	513.71
Credit/debit card (agreed to end of day reconciliation)	815.74
	2,480.95

These details agree with the amount of cash, cheques and card vouchers in the till.

Sales tax within cash register receipts amounts to $413.49.

Enter these amounts in the cash receipts record.

For a suggested answer, see the 'Answers' section at the end of the book.

ACTIVITY 2

The records for a business show the following for 20 April:

	$
Cash	441.68
Cheques	227.44
Credit/debit cards	129.79
Cash register receipts	798.91

The sales tax in the cash receipts amounts to $133.15

Cheques received in the post from credit customers were as follows:

Value of cheque from D Middleton, account 5469 = 884.84

Record this information in the cash receipts record and then post the totals to the relevant accounts.

For a suggested answer, see the 'Answers' section at the end of the book.

ACTIVITY 3

FFP makes the following payments in respect of various credit invoices and other items.

Payment of $4,230 on 23/7/X4 to N Hudson. A settlement discount of $130 was taken. This was paid by cheque (cheque number 1003). The payables ledger reference code is P4153.
On 24/7/X4, $2,350 to G Fazaal in respect of an outstanding invoice, by cheque (cheque number 1004). The payables ledger reference code is P4778.
On 28/7/X4, purchase of inventory, not on credit, of $960 including sales tax of $160 (cheque number 1005).
On 30/7/X4, payment of a salary by cheque of $2,500, using cheque number 1006. (There is no sales tax on wages and salaries).

Enter these transactions into the cash payments record.

For a suggested answer, see the 'Answers' section at the end of the book.

ACTIVITY 4

Following on from the previous activity, total each of the columns of the cash payments record and check that the totals agree.

For a suggested answer, see the 'Answers' section at the end of the book.

ACTIVITY 5

On 22 June 20X3 Viking Paper made three cheque payments. The original documents for these transactions are given below.

Task:

Write up the relevant details of these documents in the cash payments record, and total all relevant columns.

Payables ledger references are the following:

Computer Supplies - PL 32
Step Wholesale Supplies - PL 56

Viking Paper always takes advantage of any settlement discounts offered from suppliers

ACTIVITY 6

1. A sole trader introduced $1,000 into the business by cheque. What is the double entry to record this transaction?

A. Debit Petty cash / Credit Capital

B. Debit Bank / Credit Capital

C. Debit Capital / Credit Petty cash

D. Debit Capital / Credit Bank

2. Jang purchased goods from a credit supplier. The cost of the goods was $250 on which the supplier added sales tax which was charged at 20%. Jang is registered to account for sales tax. How should this transaction be recorded in Jang's accounting records?

A. Debit Purchases $250, Credit Payables $250

B. Debit Purchases $250, Credit Payables $300 Debit Sales tax $50

C. Debit Purchases $250, Credit Bank $250

D. Debit Purchases $250, Credit Bank $300 Debit Sales tax $50

For suggested answers, see the 'Answers' section at the end of the book.