I have attempted this twice and both times my instructor has sent it back with notes of things that I need to correct. I understand the assignment and I understand the work but its so archaic to me to figure this out and where I am going wrong. I have been doing bookkeeping for 3 years now but wanted to get my certificate so that I would have it but I cannot for the life of me get this final project completed accurately. Can someone please review and do this so I can review it and see where I am going wrong. Most of my mistakes are on the Bank Reconciliation, Balance Sheet, Income Statement, AR AP and sales schedule basically the only thing I actually figured out was the Merchandise inventory other then that I am hopeless and frustrated beyond means that I cannot figure it out.
Graded Project
SPLASH HOUSE
PROJECT
CONTENTS
INTRODUCTION AND COMPANY BACKGROUND
2
TRIAL BALANCE AS OF JUNE 30, 202X
3
SCHEDULE OF ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE
4
THE PROJECT
6
BEFORE YOU BEGIN: A SUMMARY OF COMPANY
TRANSACTIONS
7
SPLASH HOUSE EQUIPMENT TRANSACTIONS:
JULY 2 THROUGH JULY 31
10
BANK LOAN SCHEDULE REQUIREMENTS TRANSACTIONS
13
PREPARATION OF THE SCHEDULES
14
BLANK FORMS
16
APPENDIX A: SPLASH HOUSE EQUIPMENT LEDGER ACCOUNTS
21
APPENDIX B: SUB-LEDGERS: ACCOUNTS RECEIVABLE,
ACCOUNTS PAYABLE, INVENTORY
34
APPENDIX C: CHART OF ACCOUNTS: A COMPREHENSIVE LIST
38
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PAGE 1
SPLASH HOUSE PROJECT
INTRODUCTION AND COMPANY
BACKGROUND
Splash House Equipment is a small store in St. Catharines, Ontario, that sells water sport
equipment to families and sporting groups in the neighborhood. The business was registered over two years ago. Splash House Equipment is a sole proprietorship, owned by
Ms. Layla Romana, which sells kayaks, paddle boards, wetsuits, and fishing equipment
for use on the lake nearby. Its largest client is a growing private school, which buys equipment from the business each year for its water sports programs and events.
As some of its items are relatively expensive, Splash House Equipment allows customers
to either pay up front or pay within 30 days of purchasing the goods. If they pay within 10
days, they’re entitled to a 2 percent discount on the sale price.
Splash House has just started a new digital marketing campaign, encouraging more people to take up kayaking and purchase kayaks, especially the new Kayak 1000s, the best
on the market.
Splash House owns one truck, which enables it to provide delivery service if needed.
Delivery is included in the cost to the customer. In addition, it’s a good source of free
advertising for the company.
The owner knows that she needs to get the accounts up to date, to make sure that the
company stays profitable and to help determine whether it can afford to hire additional
employees full time to help meet the needs of the business.
The previous bookkeeper has been helping to keep the books up to date since the beginning of the year, but now the task is up to you.
The accounts are up to date as of the end of June 30, and everything you’ll need is in this
book. The company uses Sage accounting software, but—to hone your skills and enable
you to demonstrate your proficiency with the recording methodology—you’ll be completing this assignment manually.
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TRIAL BALANCE AS OF JUNE 30, 202X
The trial balance has been pulled from Sage for June 1, 202X to June 30, 202X. See the
breakdown below:
Account #
Name
Debit
Credit
1060
Toronto Island Bank
49,000
1100
Accounts Receivable
26,463
1500
Inventory
55,033
1530
Purchase Returns
1540
Purchase Discounts
1730
Plant & Machinery
1740
Plant & Machinery Accum. Dep.
1760
Motor Vehicles
1770
Motor Vehicles Accum. Dep.
2000
Accounts Payable
7,926
2001
TIB Bank Loan Payable
9,500
2160
Business Tax Payable
3,069
2170
Salaries Payable
15,000
2300
HST on Sales
3,620
2310
HST on Purchases/Services
3490
L. Romana/ Capital
3510
L. Romana/Drawings
4000
Sales
4100
Sales Returns
4200
Sales Discounts
5000
Cost of Goods Sold
5200
Store Supplies Expense
5400
Salaries Expense
5495
Maintenance Expense
112
5496
Office Expense
225
6050
Advertising Expense
6200
Bank Fees/Interest Expense
100
6500
Insurance
225
6700
Office Supplies Expense
250
6750
Rent Expense
6850
Travel/Meal Expense
340
6900
Utilities Expense
526
6950
Vehicle Expense
12,000
2,000
1,200
20,000
200
911
112,892
82,697
46,957
240
15,000
3,572
3,150
Total
236,104
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236,104
PAGE 3
SCHEDULE OF ACCOUNTS RECEIVABLE
AND ACCOUNTS PAYABLE
Accounts Receivable
Splash House is trying to keep track of everyone’s payments in cash and payments on
receivables. In St. Catharines, it generally doesn’t have any trouble with uncollectible
accounts, but sometimes it does have to prompt people for their payments. The accounts
receivable ledger on June 30 is as follows. All amounts include HST. All sales terms are
2/10, n/30.
Summary Accounts Receivable
Customer
Amount Due
Dodge Lodge
$2,023
June 1
Date of Sale
Manyak Kayak Group
$3,079
June 15
Fay Family Recreation Centre
$4,056
June 17
Namur Prince Scuba Club
$5,135
June 20
Pierce Family Sporting Group
$4,007
June 22
Aqua Vadis Sporting Group
$2,078
June 23
St. Catharines Private School
$6,085
June 27
Accounts Payable
Splash House Equipment prefers to keep up to date on its payments. Generally, the company is diligent about recording payables, as doing so helps it make sound decisions on
further purchases of stock. The accounts payable schedule on June 30 is as follows. All
amounts include HST. All supplier payable terms are 2/10, n/30.
Summary Accounts Payable
Company
Kayak Warehouse
Reelin in the Years Fishing Co.
Amount Due
Date of Purchase
$4,500
June 27
$500
June 27
Cousteau Underwater Inc.
$1,000
June 28
The Boarding Skool
$1,200
June 29
$726
June 30
Odds and Rods Fishing Supplies
Schedule of Merchandise Inventory Items
Splash House Equipment has a warehouse at the back of the store that holds all their
inventory items prior to sale. Each quarter, Splash House conducts a physical count of
the inventory to make sure that all data is accurate. As of June 30, the company had the
following merchandise schedule.
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Quantity
Unit
Value
Sale
Price
Total
Kayak 500
45
475
800
21,375
Paddle Board
29
247
425
7,163
Safety Kit
92
30
40
2,760
Wetsuit
67
220
400
14,740
Fishing Rod
23
125
163
2,875
Masks/Flippers/
Snorkel Sets
10
12
16
120
Kayak 1000
10
600
950
6,000
Item
Splash House Equipment Income Statement
Splash House Equipment has been completing its financials each month. It produced the
following income statement report at June 30, 202X.
Splash House Equipment
Abridged Income Statement
June 1, 202X–June 30, 202X
4000-Gross Sales
$82,697
Expenses and COGS
5000-Cost of Goods Sold
46,957
5200-Store Supplies Expense
240
5400-Salaries Expense
15,000
5495-Maintenance Expense
112
5496-Office Expense
225
6050-Advertising Expense
3,572
6200-Bank Fees/Interest Expense
100
6500-Insurance Expense
225
6700-Office Supplies Expense
250
6750-Rent Expense
3,150
6850-Travel/Meal Expense
340
6900-Utilities Expense
526
6950-Vehicle Expense
12,000
Total Expenses
$82,697
Net Profit
$0
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THE PROJECT
Now that you’ve been made aware of the company’s financial picture as of June 30, you,
the bookkeeper, can begin to work through Splash House’s transactions through the
month of July. You’ll have to journalize the transactions and post to the respective ledger
accounts. Once the ledger accounts have been brought to their ending balance as of
July 31, you’ll then create the following financial statements for the owner:
1. Schedule of Sales
15 points
2. Schedule of Accounts Receivable
15 points
3. Schedule of Accounts Payable
10 points
4. Schedule of Merchandise Inventory
15 points
5. Bank Reconciliation
15 points
6. Income Statement
15 points
7. Balance Sheet
15 points
The information you need to answer the following questions is within this workbook. You’ll find blank forms to help you create the required schedules.
How Cloud Accounting Works: Bank
Reconciliation vs. Manual Journal
Splash House Equipment uses Sage50 as its accounting software. The company’s previous bookkeeper is handing over Splash House Equipment to you, and so tells you the
following about the accounts and cloud accounting in general:
“Once you understand the foundations of bookkeeping, you’ll be able to apply this knowledge to any accounting software that your client uses. Sage50 is one of the most popular
accounting software programs used in Canada, so it’s good to familiarize yourself with it.
The duties for each client may vary, but generally the work of a bookkeeper is split into
four areas:
1. Invoices. All major accounting software programs allows you to create invoices
directly on the platform itself. You can input the contact details, bank account
details, description, and quantity before sending the invoice to the client. When you
create this invoice, it will automatically include this line item within your accounts
receivable Account Title on your balance sheet, indicating that you expect to
receive payment on this invoice promptly.
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2. Receipts. All major accounting software also allows you to set up receipts directly
on the platform. Once you receive a bill from a supplier, you can input the details
into the system and approve the bill. Once approved, it will automatically be
included in your accounts payable line item on your balance sheet, indicating that
you expect to pay this invoice promptly.
3. Bank reconciliation. Most major banks nowadays connect seamlessly to the
accounting software of your choosing. They’ll pull through transactions on a daily
or hourly basis. When the transactions pull through to the reconciliation page, you’ll
have to attach either the relevant invoice or bill to this transaction. In some cases,
it’s neither a bill nor an invoice; for these situations, you can manually input the
category you expect it to be in via the chart of accounts and submit. Whichever the
case, this is a simple journal entry; the accounting software just makes it easier.
4. Manual journals. If something occurs within the business that doesn’t affect the
bank account, you need to make a manual journal entry. An example of this could
be a fixed asset depreciation adjustment or a payroll journal indicating the payables for salaries, tax, and pension.”
You’ll learn these functions in more detail on the job, but for now it’s good to keep them in
mind as you go through the month of July for Splash House Equipment.
Accounting software has made the job of bookkeeping a lot more efficient, but without the
foundational knowledge acquired through good manual technique, it can create complications that aren’t easily identified and corrected.
BEFORE YOU BEGIN: A SUMMARY OF
COMPANY TRANSACTIONS
Before you begin to handle the transactions of Splash House Equipment, let’s discuss the
procedures that the company uses for four important aspects of its operations, starting
with inventory control.
Splash House Inventory Control
You’re already familiar with two alternate inventory systems, namely, the First-in/First-out
(FIFO) and Average Cost methods. Recall that the unit values of the items in question change when purchases of the items are made, resulting in different “layers” of
inventory value.
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Splash House uses a FIFO method, which presupposes that items usually will be
acquired at an increasingly expensive price, due to rising wages, increased materials
costs, and so on. As such, when items are purchased, their numbers and costs are separated into “layers” distinct from those items currently in stock.
Let’s take an example. Suppose the company has 10 mask/flipper/snorkel sets (MFS
sets) in stock at $10 per unit. It then acquires 10 additional units at $12 per unit; the FIFO
computation is as follows:
10 3 $10 5 $100
10 3 $12 5 $120
Splash House will then record two distinct layers of inventory for MFS sets with a total
inventory of $220.00.
Now comes the crucial part! When Splash House makes a sale, it will first sell all MFS
sets at $10 and any subsequent sale of MFS sets will be recorded at the new unit value.
So, if Splash House sells 14 sets, the value will be computed as: 10 3 $10 5 $100.00
and 4 3 $12 5 $48.00. The amount debited to COGS and credited to Inventory by the
sales transaction will be ($100 1 $48) 5 $148.00. The company will then have 6 MFS
sets in stock, valued at (6 3 $12) 5 $72.00.
The FIFO method is acceptable by CRA for income tax reporting; it can be used to alter
the ratio of income to COGS, but it can also enable Splash House to keep its profit margin constant on all sales, if that is its goal.
Splash House Purchasing
Splash House purchases various water sport items from suppliers and then sells them
to consumers. For this project, you’ll focus on three items: Fishing rod, Safety kit, and
Paddleboard.
Splash House must keep track of how many of each of these items are coming and going
from stock. To do this, it sets up “sub-ledger accounts” for each of these items. However,
these are not balance-sheet accounts; rather, they function as stock cards—revealing
how many of each item is in stock and at what unit value.
Suppose that the company purchases the following: 10 fishing rods at $125, 10 safety
kits at $30, and 10 paddleboards at $247. Further suppose, for simplicity’s sake, that
these are purchased from one supplier, The Water Works, and that the applicable HST is
13 percent.
The invoice from the supplier (The Water Works) will list the items, their respective unit
value, and the total amount purchased, which comes to $4,020; add 13% HST ($523
rounded) for a total of $4,543.
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Now, besides eventually paying, Splash House must credit Accounts Payable for the total
amount owed, which is $4,543. It must also debit Inventory for the amount of the goods
acquired, which is $4,020. A third entry—a debit—is made to HST on Purch./Serv. for
$523 (rounded).
Splash House will then enter the amount owed in an Account Payable subledger with
the supplier’s name on it. This subledger doesn’t appear on the balance sheet; it’s only
there to enable Splash House to keep track of the amount owed (and paid) to the specific
creditor, The Water Works. Splash House will maintain these supplier accounts for all its
suppliers. Keep in mind though, that only the Accounts Payable “control” account appears
on the balance sheet.
Splash House now enters the items acquired in their respective item subledgers—Fishing
rod, Safety kit, Paddleboard—listing the unit value of each and the total value. Again,
this helps the company keep track of its stock of each item. The information as each
item is acquired or sold affects only the Inventory “control” account, which is the balance
sheet account.
Splash House Selling Procedure
Splash House will sell the various items purchased to its customers at a profit; as such,
the amount charged the customer for any item will differ from the unit value recorded in
the item’s subledger.
Let’s leave the FIFO method aside for the time being and presuppose that Splash House
sells 5 fishing rods at $150 each and 5 safety kits at $35. In this case two distinct recording operations must take place: (1) recording the sale and (2) recording the change
in inventory.
Recording the sale entails the use of three accounts. First is a debit to Accounts
Receivable for the amount charged the customer plus HST. In this case, the AR will be
debited for $925 1 $120 (13% HST rounded), totaling $1,045. The Sales account will be
credited for $925, and the HST on Sales account will be credited for $120. In addition, a
customer subledger account will be created, and the $1,045 entered into that customer
account so that Splash House can keep track of that specific receivable. However, as
with the Account Payable subledgers discussed previously, the customer account is not a
balance sheet account.
Splash House must now adjust its inventory as a result of the sale; therefore, it will
reduce the Fishing Rods subledger by 5 rods at $125.00 and reduce the Safety Kit
subledger by 5 kits at $30.00 for a total of $775. This $775.00 must now be credited to
Inventory—to reduce it—and debited to Cost of Goods Sold, which will bring gross sales
of $925 to net sales (925 – 775 5 $150.00).
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Splash House HST Procedures
In Canada, whenever a business provides a good or service, it must charge a added
value amount, which is then owed to the government. In the case of Splash House—a
company based in Ontario—a 13% charge is levied whenever the company makes a
sale, representing the amount of the Harmonized Sales Tax (HST)—a liability—satisfied
when the amount is remitted to the government at a designated period.
Splash House must purchase the goods it plans to resell, and here, it encounters a contradiction. As it’s buying “merchandise”—goods intended to be resold—it’s exempt from
paying HST; nevertheless, the supplier to Splash House is obligated to charge HST, as
it’s making a sale.
This contradiction is resolved by the use of the HST on Purch./Serv. Account; it enables
Splash House to offset the HST on sales it owes the government, thereby realizing a
“saving” on cash remitted to settle the HST liability.
At the end of the month, Splash House “closes” the HST accounts for that month by
debiting the HST on Sales and crediting the HST on Purch./Serv. The resulting imbalance—usually requiring a payment—is satisfied by crediting Cash for the difference
between the two HST account balances. This then results in a cheque being sent to the
Receiver General for Canada representing the HST paid to the government by Splash
House. The two HST accounts are now ready to take the next month’s transactions, and
the process repeats itself.
Now you’re ready to begin entering the following transactions.
SPLASH HOUSE EQUIPMENT
TRANSACTIONS: JULY 2 THROUGH
JULY 31
07/02: Sale of 3 paddleboards to Dodge Lodge plus 13% HST. Terms are 2/10, n/30.
07/02: Purchased 5 wetsuits and 5 mask/flipper/snorkel sets from Cousteau Underwater
Inc. The wetsuits cost $240 each, and the MFS sets cost $14 each, plus HST. Terms are
2/10, n/30. Took delivery today.
07/03: Issued cheque #83 to Kayak Warehouse for amount owed as of 06/27. Don’t make
an entry or an adjustment to HST on Purchases. Take discount on full amount.
07/03: Sale of 2 Kayak 500s to Pierce Family Sporting Group plus HST. Terms are 2/10,
n/30.
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07/04: Fay Family Recreation Centre returned two safety kits purchased in June because
the kits were incomplete. Splash House agreed to reduce the Centre’s June 17 receivable accordingly. You memo yourself to adjust all accounts affected by this return.
07/05: Returned the two defective safety kits to Reelin in the Years Fishing Co. Reelin
in the Years agreed to deduct the return from the June 27 account payable. You memo
yourself to adjust all accounts affected by this return.
07/05: Issued cheque #84 to Reelin in the Years to pay amount owed on June 27 account
payable. Take discount on full amount of account payable; don’t adjust HST.
07/05: Sale of 1 Kayak 1000 to St. Catharines Private School. Terms are 2/10, n/30.
07/06: Received cheque from Manyak Kayak Group to settle account receivable from
June 15.
07/06: Received cheque from Dodge Lodge as payment of its receivable as of June 1.
07/07: Received $5,000 cheque from Namur Prince Scuba Club in partial payment of its
June 20 account receivable.
07/07: Issued cheques #85 and #86, to Cousteau Underwater Inc. and The Boarding
Skool, respectively, in payment of account balances as of June 28 for Cousteau
Underwater Inc. and June 29 for The Boarding Skool. Take discount on full amount; don’t
adjust HST.
07/08: Sale to Namur Prince Scuba Club consisting of two wetsuits—sale price $400
each plus HST. Terms are 2/10, n/30.
07/08: Received electric bill from St. Catharines Electrical Power Co. The amount is $150
due on 07/18. Do not adjust for HST.
07/09: Sale of 10 MFS sets to Aqua Vadis Sporting Group at $17.00 each plus HST.
Terms are 2/10, n/30.
07/10: Sale of 10 Kayak 500s to Manyak Kayak Group plus HST. Terms are 2/10, n/30.
07/10: Received bill from Ultrasonic Gasoline Inc. for gasoline purchased for the truck in
June. $200.00 plus HST due on July 27. Note: HST is deductible for gasoline expense.
07/10: Cheque #87: Paid June 30 balance owing to Odds and Rods Fishing Supplies.
07/11: Purchased 10 fishing rods at $135.00 each from Odds and Rods Fishing Supplies
and took delivery today. Terms are 2/10, n/30 plus HST.
07/11: Sale of 1 Kayak 1000 to the Dodge Lodge plus HST. Terms are 2/10, n/30.
07/12: Sale of 5 fishing rods to Pierce Family Sporting Group plus HST. Terms are: 2/10,
n/30.
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07/12: Sale of 5 paddleboards to St. Catharines Private School plus HST. Terms are 2/10; n/30.
07/13: Sale of 20 wetsuits to Namur Prince Scuba Club plus HST. Terms are 2/10; n/30.
07/13: Issued cheque #88 to pay electric bill from July 8. Do not adjust HST account.
07/13: Sale of 10 Kayak 500s to Fay Family Recreation Centre plus HST. Terms are 2/10; n/30.
07/14: Sale of 20 Kayak 500s to St. Catharines Private School plus HST. Terms are 2/10,
n/30.
07/15: Issued cheque #89 to pay Odds and Rods Fishing Supplies for purchase of July
11. Compute any discount available on purchase price alone; don’t deduct discount
from HST.
07/15: Sale of 5 Kayak 1000s to Manyak Kayak Group plus HST. Terms are 2/10, #n/30.
07/15: Ms. Romana just advised that the company truck had been in the Swifty Muffler
Shop and that the bill for the new muffler is $379 plus HST. She asks you to issue her
cheque #90 so that she can pay for the repairs. Vehicle expense is HST-deductible.
07/15: Received cheque from St. Catharines Private School as full payment from July 5
sale.
07/16: Received two cheques from Namur Prince Scuba Club. One cheque is for the
amount still owing on the June 20 receivable; the other is in payment of sale made on
July 8.
07/17: Received cheque from Aqua Vadis Sporting Group in payment of its July 9
receivable.
07/18: Received cheque from Manyak Kayak Group in payment of its July 10 receivable.
07/18: Ms. Romana has been trying to interest the Knot Yacht Club in some of Splash
House’s items and has taken the president and treasurer out to dinner at Captain
Steamliner’s restaurant. The bill was $250 plus HST, which she paid on her company
credit card. She asks you to note this transaction on your books. Note: Consider the
amount as a deduction from the bank account ledger account; the entertainment expense
is HST-deductible.
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BANK LOAN SCHEDULE
REQUIREMENTS TRANSACTIONS
Splash House Equipment needed to buy some more equipment for the summer activities. As there had been a reduction in sales during spring of 2020 compared to previous
years, it made the decision to take on a bank loan. The Canadian Federal Government
was working hard at providing small businesses with tax and financing incentives, so
Splash House determined that taking on a loan at this time made sense. The details are
as follows:
Bank Loan from TIC
Date Acquired:
1 February 2020
Total Amount:
12,000
Interest Amount:
360
Terms:
2 years
3% fixed interest
Monthly Payments
First Payment:
28 February 2020
07/20: Based upon the loan schedule, record the payment of principal and interest for the
month of July. (Hint: Consult the trial balance and make separate entries to record payment of the principal and payment of the interest.)
07/22: Received payment from Dodge Lodge for receivable of July 11.
07/22: Received payment from Pierce Family Sporting Group and St. Catharines Private
School in payment of their July 12 receivables.
07/23: Received payment from Fay Family Recreation Centre for July 13 receivable.
07/24: Received payment from St. Catharines Private School for receivable of July 14.
07/25: Issued cheque #91 to pay Ultrasonic Gasoline Inc. for bill due July 27.
07/29: Pay salaries: Cheque #92 (the salaries payable amount is net of deductions).
07/31: Compute the payroll taxes applicable to Salaries due next month on gross earnings of $10,000 and create accounts for:
●
Federal Income Tax Payable
●
CPP (Canada Pension Plan) Payable
●
EI (Employment Insurance) Payable
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Record the contribution amounts—employee/employer contributions can be combined.
●
Federal Income tax is 20% of gross salary.
●
Employees’ contribution is 1.7% of salaries for CPP and 2.5% of salaries for EI
●
Employer’s contribution is 1.7% of salaries for CPP and 1.4% of salaries for EI
07/31: Record the payroll taxes payable and salary expense to be paid next month.
PREPARATION OF THE SCHEDULES
Now that you’ve posted your transactions to the company’s ledger accounts; it’s time to
prepare the selected schedules for Splash House Equipment.
Sales Schedule
One of the important aspects of the company’s operations that Ms. Romana wants to
monitor is the relationship of inventory to sales. She wants to better ascertain which items
sell better than others and how much inventory of any item she should stock. As a means
to helping her get a good overview of the process, you’ll create a simple sales schedule,
dated July 31 202X. Please use the fillable form supplied at the end of the project.
Accounts Receivable Schedule
Provide a schedule of accounts receivable to Splash House Equipment dated July 31,
202X, using the fillable form supplied at the end of the project.
Accounts Payable Schedule
Provide a schedule of accounts payable for Splash House Equipment dated July 31,
202X, using the fillable form supplied at the end of the project.
Schedule of Merchandise Inventory
Ms. Romana values comparing the schedule of merchandise inventory against the sales
schedule, thereby enabling her to get a better idea of how much inventory to stock relative to customer demand. It also gives the Splash House Equipment team a record
with which to compare their physical stock count. Please complete the schedule of merchandise inventory dated July 31, 202X, using the fillable form supplied at the end of
the project.
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Income Statement
Create an income statement for Splash House Equipment for the month of July. You
may create a partial income statement similar to the one presented for June. You should
include the following sections before listing your expenses:
4000-Gross Sales
4100-Sales Returns
4200-Sales Discount
(Net Sales)
Expenses and COGS
5000-Cost of Goods Sold
Less Purchase Discounts
Less Purchase Returns
Gross profit on sales
Balance Sheet
Create a balance sheet for Splash House Equipment dated July 31, 202X. Please create
your own report form balance sheet to showcase your understanding of how a balance
sheet is presented.
Bank Reconciliation
Reconcile the bank account using the bank reconciliation table found at the end of the
workbook and using the following data. Use the balance in the bank account as per your
previous work.
NOTE: Do not use the information to adjust any of the preceding schedules, income
statements, or balance sheets.
The Toronto Island Bank has issued Splash House a bank statement for the month of
July. Included in the bank statement was the following:
Balance:
Cheques:
Amount
#83
4,410.00
#84
423.56
#87
711.48
#91
226.00
#92
15,000.00
Service charges: 82.83
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 15
BLANK FORMS
Blank Form for Schedule of Sales
Item
Quantity Sold
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
Sales Value of
Quantity Sold
PAGE 16
Blank Form for Schedule of Accounts
Receivable
Customer
Amount Due
Date of Sale
Due Date
Blank Form for Schedule of Accounts Payable
Owed to:
Description
Amount
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
Due Date
PAGE 17
Item
Opening
Balance
Amount of
Quantity
Increase
Quantity
Sold
Merchandise Inventory Items – July 202X
Latest Cost
to Buy
Total Value
of Items
Closing
Balance
Blank Form for Merchandise Schedule
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 18
Blank Form for Bank Reconciliation
Balance per Books: July 31
Add:
Deduct:
Adjusted Cash Balance
Balance per Bank Statement:
July 31
Add: 79,856.23
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 19
Deduct:
Adjusted Cash Balance
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 20
APPENDIX A: SPLASH HOUSE
EQUIPMENT LEDGER ACCOUNTS
NOTE: Not to be submitted to the school
Toronto Island Bank #1060
Date
Description
DR
CR
Balance
49,000 DR
Accounts Receivable #1100
Date
Description
DR
CR
Balance
26,463 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 21
Merchandise Inventory #1500
Date
Description
DR
CR
Balance
55,033 DR
Purchase Returns #1530
Date
Description
DR
CR
Balance
DR
CR
Balance
Purchase Discounts #1540
Date
Description
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 22
Plant and Machinery #1730
Date
Description
DR
CR
Balance
2,000 DR
Plant and Machinery Accumulated Depreciation #1740
Date
Description
DR
CR
Balance
1,200 CR
Motor Vehicles #1760
Date
Description
DR
CR
Balance
20,000 DR
Motor Vehicles Accumulated Depreciation
Date
Description
DR
CR
Balance
200 CR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 23
Accounts Payable #2000
Date
Description
DR
CR
Balance
7,926 CR
TIB Bank Loan Payable #2001
Date
Description
DR
CR
Balance
9,500 CR
Business Tax Payable #2160
Date
Description
DR
CR
Balance
3,069 CR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 24
Salaries Payable #2170
Date
Description
DR
CR
Balance
15,000 CR
Federal Income Tax Payable #2171
Date
Description
DR
CR
Balance
Description
DR
CR
Balance
Description
DR
CR
Balance
CPP Payable #2172
Date
EI Payable #2173
Date
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 25
HST on Sales #2300
Date
Description
DR
CR
Balance
3,620 CR
HST on Purchases/Services #2310
Date
Description
DR
CR
Balance
911 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 26
L. Romana Capital #3490
Date
Description
DR
CR
Balance
112,892 CR
L. Romana Drawings #3510
Date
Description
DR
CR
Description
DR
CR
Balance
Sales #4000
Date
Balance
82,697 CR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 27
Sales Returns #4100
Date
Description
DR
CR
Balance
DR
CR
Balance
Sales Discounts #4200
Date
Description
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 28
Cost of Goods Sold #5000
Date
Description
DR
CR
Balance
46,957 DR
Store Supplies Expense #5200
Date
Description
DR
CR
Balance
240 DR
Salaries Expense #5400
Date
Description
DR
CR
Balance
15,000 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 29
Maintenance Expense #5495
Date
Description
DR
CR
Balance
112 DR
Office Expense #5496
Date
Description
DR
CR
Balance
225 DR
Advertising Expense #6050
Date
Description
DR
CR
Balance
3,572 DR
Bank Fees/Interest Expense #6200
Date
Description
DR
CR
Balance
100 DR
Insurance #6500
Date
Description
DR
CR
Balance
225 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 30
Office Supplies Expense #6700
Date
Description
DR
CR
Balance
250 DR
Rent Expense #6750
Date
Description
DR
CR
Balance
3,150 DR
Travel/Meal Expense #6850
Date
Description
DR
CR
Balance
340 DR
Utilities Expense #6900
Date
Description
DR
CR
Balance
526 DR
Vehicle Expense #6950
Date
Description
DR
CR
Balance
12,000 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 31
Kayak 500
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
Balance
COGS
06/30
Units
Cost
Amount
45
475
21,375
Paddle Board
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
Balance
COGS
06/30
Units
Cost
Amount
29
247
7,163
Safety Kit
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
Balance
COGS
06/30
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
Units
Cost
Amount
92
30
2,760
PAGE 32
Wetsuit
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
Balance
COGS
06/30
Units
Cost
Amount
67
220
14,740
Fishing Rod
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
Balance
COGS
06/30
Units
Cost
Amount
23
125
2,875
Masks/Flippers/Snorkel Sets
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Units
06/30
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
Balance
COGS
Units
Cost
Amount
10
12
120
PAGE 33
Kayak 1000
Date
#
Purchases
Units
Cost
Sold
Amount
Amount
Balance
Units
COGS
06/30
Units
Cost
Amount
10
600
6,000
APPENDIX B: SUB-LEDGERS:
ACCOUNTS RECEIVABLE, ACCOUNTS
PAYABLE, INVENTORY
NOTE: Not to be submitted to the school.
Dodge Lodge
Date
June 30
Description
DR
CR
Balance
Balance
2,023 DR
Manyak Kayak Group
Date
June 30
Description
DR
Balance
CR
Balance
3,079 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 34
Fay Family Recreation Centre
Date
June 30
Description
DR
CR
Balance
Balance
4,056 DR
Namur Prince Scuba Club
Date
June 30
Description
DR
CR
Balance
Balance
5,135 DR
Pierce Family Sporting Group
Date
June 30
Description
DR
CR
Balance
Balance
4,007 DR
Aqua Vadis Sporting Group
Date
June 30
Description
DR
Balance
CR
Balance
2,078 DR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 35
St Catharine’s Private School
Date
June 30
Description
DR
CR
Balance
Balance
6,085 DR
Kayak Warehouse
Date
June 30
Description
DR
CR
Balance
Balance
4,500 CR
Reelin in the Years Fishing Co.
Date
June 30
Description
DR
CR
Balance
Balance
500 CR
Cousteau Underwater Inc.
Date
June 30
Description
DR
Balance
CR
Balance
1,000 CR
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 36
The Boarding Skool
Date
June 30
Description
DR
CR
Balance
Balance
1,200 CR
Odds and Rods Fishing Supplies
Date
June 30
Description
DR
Balance
CR
Balance
726 CR
For purposes of simplicity, we have assumed a 13% HST tax on all purchases and sales,
and assumed all customers and suppliers are in Ontario. In actual fact, it depends on
what you’re buying and selling, as well as the location of customers and suppliers.
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 37
APPENDIX C: CHART OF ACCOUNTS: A
COMPREHENSIVE LIST
The following list contains many more of the possible accounts that could be in a company’s chart of accounts. Please note that you wouldn’t be expected to use every one of
them in your bookkeeping career, as a good many of them apply to very specific business contexts. For example, QPP and QST accounts are used solely in the province of
Quebec. For the purposes of this exercise, we assume that all activity occurred within the
province of Ontario.
Ledger Name
Category
Computer Equipment Cost
Assets
Vehicle Cost
Assets
Cash on Hand
Bank
Chequing
Bank
Bank Account 1
Bank
Savings Account
Bank
Bank Account 1
Bank
Accounts Receivable
Assets
Payroll Advances & Loans
Assets
Prepaid Expenses
Assets
Inventory
Assets
Allowance for Doubtful Debtors
Assets
Building – Cost
Fixed Assets
Building – Accumulated Depreciation
Fixed Assets
Plant and Machinery – Cost
Fixed Assets
Plant and Machinery – Accumulated Depreciation
Fixed Assets
Motor Vehicles – Cost
Fixed Assets
Motor Vehicles – Accumulated Depreciation
Fixed Assets
Accounts Payable
Liabilities
RBC Bank Loan
Liabilities
Corporate Taxes Payable
Liabilities
Vacation Payable
Liabilities
EI Payable
Liabilities
CPP Payable
Liabilities
QPP Payable
Liabilities
Federal Income Tax Payable
Liabilities
Quebec Income Taxes Payable
Liabilities
WCB Payable
Liabilities
EHT Payable
Liabilities
QHCF Payable
Liabilities
(continued)
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 38
Ledger Name
Category
QPIP Payable
Liabilities
RRSP Payable
Liabilities
RRSP – Employer’s Share
Liabilities
GST/HST Charged on Sales
Liabilities
GST/HST Paid on Purchases
Liabilities
GST/HST Payable
Liabilities
QST Charged on Sales
Liabilities
QST Paid on Purchases
Liabilities
QST Payable
Liabilities
GST/QST Adjustments
Liabilities
BC PST Collectible on Sales
Liabilities
SK PST Collectible on Sales
Liabilities
MB PST Collectible on Sales
Liabilities
Customer Deposits
Liabilities
Accruals
Liabilities
Additional Paid-In Equity
Equity
Drawings
Equity
Retained Earnings
Equity
Share Capital
Equity
Sales – Products
Revenue
Sales – Services
Revenue
Sales Discounts
Revenue
Shipping Revenue
Revenue
Professional Fees
Revenue
PST Commission
Revenue
Interest Income
Revenue
Other Income
Revenue
Cost of Goods Sold
Expenses
Purchase Discounts
Expenses
Shipping Expenses
Expenses
Inventory Adjustments
Expenses
Wages
Expenses
EI Expense
Expenses
CPP Expense
Expenses
QPP Expense
Direct Expenses
WCB Expense
Direct Expenses
EHT Expense
Direct Expenses
QPIP Expense
Direct Expenses
QHCF Expense
Direct Expenses
RRSP – Employer’s Share
Direct Expenses
Employee Benefits
Direct Expenses
Subcontrators
Expenses
(continued)
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 39
Ledger Name
Category
IT and Software
Expenses
Accounting and Legal
Expenses
Advertising
Expenses
Amortization Expense
Expenses
Bad Debts
Expenses
Bank Fees and Interest
Expenses
Business Fees and Licenses
Expenses
Credit Card Fees
Expenses
Exchange Rate Gain/(Loss)
Expenses
General Expenses
Expenses
Income Tax Expenses
Expenses
Insurance
Expenses
Meals and Entertainment
Expenses
Maintenance and Repairs
Expenses
Property Taxes
Expenses
Office Supplies
Expenses
Rent or Lease
Expenses
Telephone
Expenses
Travel
Expenses
Utilities
Expenses
Vehicle
Expenses
GST/HST/QST Unreclaimable Tax Expenses
Expenses
Retained Earnings
Expenses
Corrections
Expenses
© PENN FOSTER, INC. 2021
SPLASH HOUSE PROJECT
Graded Project
PAGE 40
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