PRACTICE SET V.1. SEMESTER ONE 2014 CHOICE TRUCK TYRES
67 Coppin Street, Bayside, VIC 3010 Tom Blakeney, a semi-retired truck driver started a retail business on 1 February 2014, supplying two grades of truck tyres for a specific truck model. They are Standard TT and Premium TT, and TT stands for Truck Tyres. As most of his customers are truck companies, Tom is not required to provide delivery services. Therefore, he did not have to invest in motor vehicles. Instead, he invested in equipment for loading and unloading tyres by paying $10,000 cash on the day of commencement of business. Tom 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 Tom, 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 1st of April 2014.

CHOICE TRUCK TYRES TRIAL BALANCE AS AT 1 APRIL 2014 ACCOUNT Cash at bank Accounts Receivable Equipment (paid cash on 1 February 2014) Accounts Payable Loan from BankOnUs Ltd Capital – Tom Blakeney Drawings – Tom Blakeney (Equity) Sales Purchases Electricity Equipment Running Costs Insurance - Equipment Interest Office Supplies Rent Telephone Wages TOTAL DEBIT $ 15,320 46,500 10,000 25,000 41,670 20,000 5,000 66,000 65,000 1,500 200 300 1,000 150 6,000 200 1,500 152,670 152,670 CREDIT $

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Information relating to the opening trial balance is as follows: 1. The Purchases and Sales history for the past two months is as follows: Purchases Sales Opening Inventory As at 1 April 2014 Standard TT 150 @ $300ea 100 @ $450ea 50 @ $300ea Premium TT 40 @ $500ea