The transactions provided below for Best Timber Supplies relate to an order for timber placed by a customer,
James Hay, to the value of $3500 plus GST (cost $1500 plus GST).
• 28 June 2012: A deposit of $500 was received from James Hay (Receipt 235).
• 2 July 2012: The goods were delivered to James Hay (Invoice 121 indicating credit terms 2/14, n/30).
• 9 July 2012: James Hay settled the account (Receipt 261).
The business prepares reports monthly.
Prepare the journal entries for the above transactions, including the adjusting entry that is necessary in
July 2012.
right
so special journals get posted in every reporting period than are zeroed. The deposit should have been recorded in the june CRJ, not in the one accounted for july seeing that it the business operates on a monthly reporting period basisI recorded it anyway though. This is off last year's exam
Yes, the Deposit would have been recorded in the Reporting Period of June's Special Journals, specifically the CRJ.
However, the Deposit (Prepaid Sales Revenue) must be removed in the General Journal for this Reporting Period. The Deposit is no longer a Current Liability in the Balance Sheet of Best Timber Supplies. Instead, its now Sales Revenue earned because the good have been delivered. So, we need to get rid of this Liability that was created close to the end of June.
Therefore, in the General Journal:
* DR: Prepaid Sales Revenue
* CR: Sales Revenue
and the record rest of the transactions into the Special Journals as usual.
Is this what you're asking for?
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