Question 2 Since Gulliver\'s travels is growing rapidly there is a need for jour

Question

Question 2 Since Gulliver's travels is growing rapidly there is a need for journalizing the financial cth that are taking place in the company. So you are required to ghve the journal entries following data that took place in the month of July. Make use of the following accounts: 010 Building 020 Equipment 040 Equity for the 041 Withdrawals 060 Mortgage 100 Cash 130 Accounts receivable 140 Accounts payable 180 VAT receivable 181 VAT payable 400 Advertising expenses 420 Interest expenses 430 Depreciation expenses 700 Inventories 800 Cost of goods sokd 820 Discounts given 840 Sales revenue 5,800 August 4: Sold: a trip to Hawai to Mr. D. Dekker for VAT 21% 7,018 Invcice V-26 sent. The purchase price of the trip was 4,060 1,100 August 10. Purchased: 2 office chairs for 1- VAT21% Invoice-25 received August 15: Purchased: booked hotel rooms in hotel Medclub in Nice for the summer 1,200 VAT 21% Invoice I- 26 received August 17: Sent back to Office Supply Ltd. 1 office chair 550 115 VAT 21% Credit invoice I -27 received August 21: According to B 35 Paid cash to creditors (suppliers) Paid for advertising expenses, (including 42 VAT) Received cash from debtors 5,400 242 3,100

Explanation / Answer

Solution :

Journal Entries Date Doc Account Debit (€) Credit (€) 4-Aug V-26 Accounts Receivables Dr 7018     To Sales Revenue 5800     To VAT Payable 1218 (Being Sales recorded ) 4-Aug V-26 Cost of Goods Sold Dr 4060.00     To Inventories 4060.00 (Being Inventory transferred to COGS) 10-Aug I-25 Equipment Dr 1100 VAT Receivable Dr 231     To Accounts Payable 1331 (Being office chair purchased) 15-Aug I-26 Inventories Dr 1200 VAT Receivable Dr 252     To Accounts Payable 1452 (Being Hotel room booked) 17-Aug I-27 Accounts Payable Dr 665     To Equipment 550     To VAT Receivable 115 (Being Chair returned) 21-Aug B 35 Accounts Payable Dr 5400     To Cash 5400 (Being Cash paid to creditors) 21-Aug B 35 Advertising Expenses Dr 200 VAT Receivable Dr 42 242     To Cash (Being Advertising Expense paid) 21-Aug B 35 Cash Dr 3100     To Accounts Receivable 3100 (Being Cash received from debtors) 23-Aug V 27 Discounts given Dr 300 VAT Payable Dr 63     To Accounts Receivable 363 (Being discount given to customer) 31-Aug D 12 Depreciation Expenses Dr 200     To Equipment 200 (Being depreciation charged on equiment) 31-Aug B 36 Cash Dr 5000     To Equity 5000 (Being cash introduced in business by owner)

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