Reference no: EM132942758
Jack Smith, a baker, has been working at his friend's bakery a part time basis for the past 3 years. As of January 1, 2018, Jack decided to pursue his own dreams of buying and selling pastries. He rented a space from his friend and entered into the following transactions during January 2018:
Jan 1 Jack invested the following assets into the business: cash, $12,000; office equipment, $30,000 and a bank balance of $80,000.
Jan 2 Paid rent for January by cheque $14,000
Jan 2 Purchased motor vehicle on credit from Deals on Wheels Ltd. for $50,000.
Jan 3 Bought office furniture from Kurtz JA. Ltd, paying by cheque $15,000
Jan. 3 Bought merchandise for resale by cheque $20,000.
Jan 3 Sold merchandise to Candy Lou, for cash $10,000.
Jan 4 Sold merchandise on credit to Patrick Poser $40,000.
Jan 5 Sold merchandise on credit to Janice Russell $4,500.
Jan 6 Patrick Poser settled his account with cash receiving a 5% cash discount.
Jan 6 Merchandise valued at $1,050, sold to Janice Russell on January 5, was returned to Jack Smith. A credit note was given to Janice Russell.
Jan 7 Sold merchandise on credit to J.F. Mills Ltd $33,000.
Jan 8 Bought merchandise on credit from Natalie Lowe $12,000.
Jan 11 Received a long term loan from JNBC Bank for $ 45,000 by cheque.
Jan 11 Bought stationery for cash $12,000.
Jan 15 Bought merchandise on credit from Nickette Morgan $17,500.
Jan 18 Lodged cash of $13,500 to the business bank account
Jan 20 Jack took pastries for his daughter's 5th birthday party amounting to $7,000
Jan 20 Paid Natalie Lowe $10,800 in full settlement of the balance outstanding by cheque having received a discount of $1,200
Jan 25 Commission was received by cash, $5,000
Jan 12 Paid wages by cash $15,000.
Jan 27 Purchased merchandise on credit from Kukupas Creations for $8,000.
Jan 30 Paid electricity by cash $5,600, insurance $12,000 by cheque.
REQUIRED:
Problem 1: Journalize each of the above transactions. Narratives are not required.
Problem 2: Post all the above transactions in the General ledger (please do not use any other ledger)
Problem 3: Extract an unadjusted trial balance with the inclusion of the appropriate headings
Problem 4: Prepare an adjusted trial balance with the inclusion of the above balances and new accounts
Problem 5: Prepare the Statement of Profit or Loss and the Statement of Financial Position for the period under review. Please include the appropriate headings. For use in the financial statements, closing stock amounts to $3,000 at the end of the month.