QUESTION 1: General Journal, General Ledger, Trial Balance (34 marks)
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Part 1 (19 marks)
Record the General Journal entries in the proforma provided on the following pages to record each of the following transactions (where required). Remember to format the journals correctly and include narration (explanation) for each journal entry.
Bella Vista is the sole proprietor of Oceanview Beach House Hire. Bella has been successfully operating Oceanview Beach House Hire, a short-term beachside accommodation business, for the last six years. The business has managed twenty beachside houses which can accommodate from two up to twenty guests. Bella has been so busy with the management of the business that she has been unable to attend to the bookkeeping, so she has recently hired Pompano & Tarpon Accounting Solutions Pty Ltd to take over the accounting function.
You are a graduate accountant working at Pompano & Tarpon Accounting Solutions Pty Ltd and have been given responsibility for preparing the monthly general journal entries for Oceanview Beach House Hire. The following is a list of transactions that took place during the month of February 2019 that you need to record.
Feb 1 Oceanview Beach House Hire has taken a booking for three beach houses from Aba Daba Doo bank who are hosting a team building event for some of their employees in the last week of February. Aba Daba Doo Bank have booked each of the three houses for 4 nights at a cost of $1,200 per night per beach house. Aba Daba Doo have paid a 40% deposit in cash and they will pay the remaining amount when they arrive.
Feb 2 Oceanview Beach House Hire paid $367 to Spadefish Plumbing for clearing the plumbing blockage in the beach house “Searobin” caused by excessive amounts of sand going into the shower drain.
Feb 4 Oceanview Beach House Hire purchased one new 16 person dining table for the beach house “Wahoo” from Jetty Plank Furniture Pty Ltd. The dining table cost $2,500, 75% of the purchase was paid for in cash, with the balance payable in 30 days.
Feb 5 Remora Movers Ltd, a furniture delivery business who delivered the new 16-person dining table (purchased on 4 February) to the beach house “Wahoo”, sent an invoice (#8923) to Oceanview Beach House Hire for $380 which has payment terms of 30 days.
Feb 11 Oceanview Beach House Hire purchased a new software program called “Easy Bookings” to assist Bella in making accommodation bookings across the 20 beach houses. It will also be available on the Oceanview Beach House Hire website for prospective clients to see what properties are available and when and to make their own bookings subject to a review by Bella. This functionality is expected to increase future beach house hire bookings. Bella expects the software to be used for at least the next five years. The Easy Bookings software program cost $1863 and was paid in cash.
Feb 17 Oceanview Beach House Hire paid the remaining 25% they owed Jetty Plank Furniture for the table they purchased on 4 February.
Feb 18 Bella Vista visited a physiotherapist for a sore shoulder as a result of an injury sustained while doing yoga. She paid $85 for the appointment using the business bank account.
Feb 27 Oceanview Beach House Hire received the remaining amount owed by Aba Daba Doo Bank when their employees arrived.
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