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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
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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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
Transcribed Image Text: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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