Reference no: EM133177959
Question - 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 the following transactions during January 2022:
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 $15,000 and 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 and 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. (Tip: do a rough check of the balance owed by Patrick Poser)
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 VTBC Bank for $ 45,000 by cheque and bought stationery for cash $12,000.
Jan 15 Bought merchandise on credit from Nikkita 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 (Tip: do a rough check of the balance owed to Natalie Lowe)
Jan 25 Commission was received by cash, $5,000 and 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 -
1. Journalize the transactions for the month. (Narrations are not necessary).
2. Post the above transactions in the General ledger.