ACC152 - Accounting Bubbeloo Bubblegum is a family Run Store

Assignment Task

Case Study

Bubbeloo Bubblegum is a family-run store that sells old-fashioned sweet treats and candy. The sole owner, Mr Billy Bonka, started the store many years ago because of his love for bubblegum and expanded the store over the years to include various other treats such as caramel toffees, bubbly chocolate, salty liquorish, chewy choc-chip cookies and rainbow sticky sweets. The original store is still open to the public for walk-ins, but Bubbeloo’s main income stream is from wholesale to retailers. Mr Bonka’s family members share his passion to make the world a sweeter place and are all involved in his business, in various capacities. However, none of them are particularly fond of numbers or keeping accounting records. Mr Bonka therefore approached you, as a family friend and accounting fundi, to assist with a few matters.

Below follows an extract of the summary you made of all transactions after working through all the source documents provided to you by Mr Bonka’s son, Ben. The transactions below still need to be captured in the accounting recordings of Bubbeloo Bubblegum. All the following transactions relate to April 2024.

1. Inventory to the value R20 000.00 was bought on credit from an approved provider, XYZ Ltd, on 3 April 2024 and invoice #478 was issued to Bubbeloo Bubblegum.

2. The monthly electricity bill of R2 500.00 was paid via an electronic fund transfer (EFT) to the local municipality, based on invoice 8973, dated 10 April 2024.

3.  A second-hand delivery vehicle with a purchase price of R120 000.00 was bought on credit from WeBuyVehicles on 18 April 2024 (invoice #489). A cash deposit of R20 000.00 was paid to secure the purchase.

4. The rental payment of R7 000.00 for April 2024 for the headquarters office building was made on 20 April 2024, via an EFT to LinPop, as per invoice LP178, dated 20 April 2024.

5. Goods to the value of R5 000.00 (cost) were sold for cash, on 23 April 2024, recorded on the cash register roll.

6. Interest of R340.00 recorded on a debit bank balance, as per the bank statement on 30 April 2024, downloaded from Standard Bank’s online banking website.

7. Goods to the value of R4 000.00 (cost) were sold on credit to Sweet Surprises (Pty) Ltd, and invoice number BB156 was issued on 30 April 2024.

8. Instead of buying new furniture, Mr Billy Bonka decided to furnish his office by transferring items from his personal antique furniture collection to Bubbeloo Bubblegum on 30 April 2024. The furniture is valued at R20 000.00.

Task

1. Prepare an accounting equation table for the above transactions, by making use of the spreadsheet provided for this purpose (complete this task on the tab titled ‘Task 1’). Disregard VAT implications for the purposes of Task 1.

2. Capture the transactions in the correct journals, also known as books of first entry, by making use of the spreadsheet provided for this purpose (complete this task on the tab titled ‘Task

3. Balance the following general ledger accounts on 30 April 2024. (Please complete this task on the Word document titled 'SF1_Worksheet' available for download on Canvas. 

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