Waffle Shack is a registered vendor, with a number of transactions in July that ithas not yet encountered. It needs assistance in recording these transactions inits financial records. In order to assist the business, prepare the general journalentries (with narrations) for the following three transactions (voucher and folionumbers are not required):Transaction 1As a result of one of the finance staff members being on leave and no onefulfilling the role, the business did not settle one of their outstanding supplieraccounts within the settlement period. As a result, the supplier charged theminterest for one month on their outstanding balance of R146 000 on 31 July,with the supplier's annual interest charge being 20%.DateDetailsDebitCreditTransaction 2The owner of the business took a waffle iron from the business for use in herhome on15 July. The business initially purchased the waffle iron for R7 500. Its marketvalue is now R5 250.DateDetailsDebitCreditTransaction 3A long-standing customer was offered a settlement discount if they paid theiraccount in full within two months. The client's outstanding balance was R55000 at the end of May, of which 30% was paid during June. No further saleswere made to the customer during June and July and the client settled theremaining balance in full on 26 July, to take advantage of a 10% settlementdiscount on the amount outstanding in July. The business would like to knowhow to record the discount in their financial records.DateDetailsDebitCredit

ith narrations) for the following three transactions (voucher and are not required): on 1 t of one of the finance staff members being on leave and no or ne role, the business did not settle one of their outstanding sup within the settlement period. As a result, the supplier charged t

ith narrations) for the following three transactions (voucher and are not required): on 1 t of one of the finance staff members being on leave and no or ne role, the business did not settle one of their outstanding sup within the settlement period. As a result, the supplier charged t

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Waffle Shack is a registered vendor, with a number of transactions in July that it
has not yet encountered. It needs assistance in recording these transactions in
its financial records. In order to assist the business, prepare the general journal
entries (with narrations) for the following three transactions (voucher and folio
numbers are not required):
Transaction 1
As a result of one of the finance staff members being on leave and no one
fulfilling the role, the business did not settle one of their outstanding supplier
accounts within the settlement period. As a result, the supplier charged them
interest for one month on their outstanding balance of R146 000 on 31 July,
with the supplier's annual interest charge being 20%.
Date
Details
Debit
Credit
Transaction 2
The owner of the business took a waffle iron from the business for use in her
home on
15 July. The business initially purchased the waffle iron for R7 500. Its market
value is now R5 250.
Date
Details
Debit
Credit
Transaction 3
A long-standing customer was offered a settlement discount if they paid their
account in full within two months. The client's outstanding balance was R55
000 at the end of May, of which 30% was paid during June. No further sales
were made to the customer during June and July and the client settled the
remaining balance in full on 26 July, to take advantage of a 10% settlement
discount on the amount outstanding in July. The business would like to know
how to record the discount in their financial records.
Date
Details
Debit
Credit

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