U2, AOS 2 - Lesson 11 - Balance Sheet

Question 1

Formula for Accounts Payable:

Answer 1

Accounts Payable at start (from the previous Balance Sheet)

Plus Credit purchases (including GST) (from the Purchases Journal)

Less Purchase returns (including GST) (from the additional info)

Less Accounts Payable (Payment plus discount) (from the CPJ)

= Accounts Payable at end (for the next Balance Sheet)

Question 2

Formula for Accounts Receivable

Answer 2

Accounts Receivable balance at start (from the previous Balance Sheet)

Plus Credit sales (inc. GST) (from the Sales Journal)

Less Sales Returns (inc. GST) (from additional info/Income statement)

Less Accounts Receivable (Receipts + Discount) (from the Cash Receipts Journal)

Less Bad debts (inc. GST) (from Additional Information/ Income statement)

= Accounts Receivable balance at end (for the next Balance Sheet)

Question 3

GST Formula

Answer 3

GST balance at start – From previous Balance Sheet
Plus GST on Cash Sales – From the Cash Receipts Journal
Plus GST on Credit Sales – From the Sales Journal
Less GST on Sales Returns – From the Additional information
Less GST on Cash purchases – From the Cash Payments Journal
Less GST on Credit purchases – from the Purchases Journal
Plus GST on Purchase returns – From the Additional information
Less GST on Bad Debts – From the Additional Information
Less GST Settlement / Plus GST Refund
= GST balance at end

Question 4

GST Payable reported as…

Answer 4

GST Payable → would be reported as a Current Liability as it represents obligation to transfer an economic resource (by paying the ATO a GST settlement) in the next 12 months.

Question 5

GST Receivable reported as…

Answer 5

GST Receivable → would be reported as a Current Asset as it represents as it is a present economic resource controlled by the business that will produce economic benefits (when the refund is received) in the next 12 months.

Question 6

GST Balance can be either…

Answer 6

Receivable or payable

Question 7

GST Receivable is settled by…

Answer 7

A GST refund from the ATO

Question 8

GST Payable is settled by…

Answer 8

The business making a GST Settlement to the ATO.