HI5001: Jim’s Cleaning Services Prepares Financial Statements At The End: Accounting For Business Decisions Assignment, OU, Australia

Subject HI5001: Accounting For Business Decision

Question 1 

Jim’s Cleaning Services prepares financial statements at the end of each month. The following information is in relation to the month of July.

1. On 1 July, rent of $3,600 for the 6-month period ending 31 December is paid.

2. A 1-year insurance policy is purchased on 1 July for $1,560.

3. On 10 July, the Cross Hotel paid the business $2,800 in advance for doing their cleaning for the next 3 months. 30% of the cleaning work has been provided in the month of July.

4. The cleaning supplies of $2,340 were purchased on 15 July. The supplies account had a $260 debit balance on 1 July and $220 of supplies are on hand as of 31 July.

5. The business has two part-time employees who each earn $190 per day. They were both worked 16 days a month. They were paid for the 14 days on 28 July, but not for the last 2 days for which they have worked after 28 July.

Are You Searching Answer of this Question? Request Australian Writers to Write a plagiarism Free Copy for You.


a) Record the above transactions that occurred in the month of July in the general journal.

b) Prepare the necessary adjusting entries at the end of the month of July.

Question 2 

The following information is produced by comparing the cash deposits and withdrawals recorded by the M&N Windows Ltd for the month with their most recent bank statement received on 30 June 2019:

a. M&N Windows Ltd’ cash at bank ledger at 30 June 2019 is: $75,864

b. Credit balance as per bank statement as at 30 June 2019 is: $101,160

c. Bank statement shows an electronic transfer from a customer of $3,864

d. Deposits in transit, $12,540

e. Interest earned on the bank account, $75

f. unpresented cheques, $37,407

g. Service charge included in the bank statement, $150

h. Cheque for insurance expense, $5,370 incorrectly recorded in books as $5,910

i. A dishonored cheque written by a client Jim Smith, $3,900

Get Solution of this Assessment. Hire Experts to solve this assignment for you Before Deadline.

The entity doesn’t use special journals for record-keeping. The entity prepares the bank reconciliation statement at the end of each month.


a) Prepare a bank reconciliation statement for M&N Windows Ltd at 30 June 2019.

b) Discuss why a bank reconciliation is still necessary even most of the transactions take place using electronic transfer of funds nowadays.

Question 3 

InvisiGuard Ltd sells security doors. The majority of its sales are on credit except for a small number of cash sales each year. The accounting records at 30 June 2019 reveal the following. Ignore GST.

Credit sales (for the year of 2019) $2,100,000
Cash sales (for the year of 2019) 20,000
Credit sales returns and allowances (for the year of 2019) 80,000
Accounts receivable (balance at 30 June 2019) 593,000
Allowance for doubtful debts (credit balance at 30 June 2019) 2,800

Stuck in Completing this Assignment and feeling stressed ? Take our Private Writing Services.

The company’s yearly bad debts expense had been estimated at 2.5% of net credit sales revenue in the past. The management of InvisiGuard Ltd has decided to compare the current method with an aging of accounts receivable method. The following analysis was obtained with respect to the accounts receivable.

Balance % of estimated uncollectable
Accounts not yet due $351,200 1
Accounts overdue 10 – 30 days 92,000 3
31 – 60 days 78,000 10
61 – 120 days 40,800 30
121 days and over 31,000 60
Total 593,000


a) Prepare the journal entries to adjust the Allowance for Doubtful Debts at 30 June 2019 under the following two methods.

i. the net credit sales method

ii. the aging of accounts receivable method.

b) Prepare ledger account for the Allowance for Doubtful Debts to account under both methods mentioned in a), using running balance format.

c) Assume that the allowance account had a debit balance of $980 at 30 June 2018, determine the bad debt expense for the year and the balance in the allowance account under the aging method.

d) Explain, with reference to your calculation, why the two different methods result in different balances.

Are You Searching Answer of this Question? Request Australian Writers to Write a plagiarism Free Copy for You.

Get Help By Expert

Get accounting assignment help in (assignments by the experts of AustraliaAssignmentHelp.com.  University assignment help has a team of assignment writers that understand student's needs and work hard. Worry no more and ask us for a business assignment service at a low price

Recent Solved Questions