Bowl-Me-Over (BMO) is a new Ten-Pin Bowling business that recently commenced development and operations on the 1st July 2020, with the financial year ending the 30th June 2021.
The business is currently registered and operated as a Sole-Trader. Joanne, the owner, is not aware of general accounting practices and has asked you to record the transactions that occurred in the first month of business.
The transactions for July 2020 were: 01/07/20 Joanne invested £3,000,000 of Capital into the business in the form of cash 01/07/20 BMO sourced additional funding from the local bank in the form of a loan to the value of £6,000,000. This Loan is to be paid back in ten annual instalments with the first instalment due on the 30th June 2021.
01/07/20 BMO has secured the services of Happy-Harry’s Builders to construct the building for the bowling alley amounting to £1,500,000. This was paid in full on the day he secured their services.
01/07/20 BMO purchased land to the value of £3,000,000 which will be used to build the bowling alley. 01/07/20 BMO paid the Local Council £100,000 for planning and construction services to prepare the land prior to building the Bowling Alley.
01/07/20 BMO purchased a Pin-Sorting Machine for £60,000
01/07/20 BMO purchased two vehicles for cash amounting to £75,000 02/07/20
BMO purchased all the pins and bowling balls from You-Bowl on credit for
£1,000,000. The payment terms are 60-days, though if a customer pays their account within the month of purchase they’ll can obtain 10% discount on the amount outstanding. 02/07/20 Paid £240,000 cash to Slip-‘n’-Slide Shoe Company for bowling shoes
02/07/20 Paid £150 for fuel for the vehicles 07/07/20 Paid weekly wages amounting to £3,500 08/07/20 Paid the annual insurance policy for the business amounting to £24,000. This policy covers the whole financial year 14/07/20 Paid weekly wages amounting to £3,500 18/07/20 Joanne decided to pay the outstanding amount to
You-Bowl 19/07/20 Joanne decided to book an exotic holiday for her and her partner amounting to £12,000, and used the company’s bank account to make the purchase 21/07/20 Paid weekly wages amounting to £3,500 28/07/20 BMO Entered into a contract with a local Loyalty-Card organisation (All-Loyal) to participate in their voucher scheme. In securing the contract BMO received a one-off upfront cash payment for £500,000 from All-Loyal.