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Prepare general journal entries dated 30/6/2015 for the following:-
Long Service Leave totalling $5 800 was paid during the year. This amount was incorrectly debited to the Electricity Account. Prepare the general journal entry to transfer this amount to the provision of Long Service Leave
We must move $5 800 from the Electricity Account to the Provision for Long Service Leave. Staff members are entitled to Long Service Leave but they have not yet taken their leave. The company has a liability to their staff to pay their Long Service Leave. They must provide or make an allowance for this future expense.
The Provision for Long Service Leave was $10,000 before the above adjustment. Prepare a general journal entry to take up the new provision for long service leave as at 30/6/2015 $8,700.
Prepare the general journal entry to record the cost of goods sold. Opening stock 1/7/2014 $3,000; Purchases of stock $15,000; Closing Stock @ 30/6/2015 $5,000
The Provision for Long Service Leave account showed a balance of $10,000 before the adjustment. Therefore, the adjustment reduced the Provision for Long Service Leave account by $5800 to a balance of $4,020. We need to increase the balance from $4020 to $8700 which is an additional $4500.00. Increase Annual Leave by $4500.00 and increase Long Service Leave Provision by $4500.00