Reference no: EM133004193

Question - This the new business started in January. The following transactions are done by the business in the month of January.

Assumption: The Cost of goods sold is 80% of the sales revenue

Jan 1 Owner started firm by depositing $15,000 into a bank account

Jan 2 Bought Equipment on credit from John & son $3,400

Jan 2 Repair shop fittings, paid by cheque $600

Jan 3 Bought Merchandise on credit from suppliers for $2,800

Jan 4 Paid rent by cheque for 3 month $240 in advance

Jan 5 Received loan of $300 in cash from King Kong

Jan 5 Sold merchandise on credit to a Customers as follows $1400

Jan 6 Bought office equipment on credit from Arthur & Associates $740

Jan 7 Cash sale $260

Jan 8 Paid wages in cash $90

Jan 9 Bought office stationary for cash $280

Jan 11 Sold Merchandise on credit to customers for $195

Jan 12 Returned merchandise to suppliers worth $115

Jan 13 Paid John & son $3,400 by cheque

Jan 14 Bought office stationery on credit $150

Jan 15 Bought Merchandise on credit for $1080

Jan 16 Merchandise returned $56

Jan 17 Paid for credit merchandise purchases $1,350 by cheque

Jan 19 Repaid part of King Kong's loan by cheque $120

Jan 20 Cheques received from $425 for credit sales

Jan 21 Owner took $100 drawings in cash

Jan 28 Bought Merchandise for cash $90

Jan 30 Paid to suppliers for the merchandise purchased on credit by cheque $400

Adjustments:

31 Unpaid Salary to an employee $120

31 Advance rent for the month i.e., $80 is availed

31 Depreciation is charged at the rate of 20% on the value of Equipment

31 It was estimated that a $110 is consumed during the month.

Required - Perform the following activities:

Question 1 - Prepare General Journal for transaction excluding Adjustments, will done later.

Question 2 - General Journal prepared in question 1 to be posted to relevant ledgers.

Question 3 - Using ledgers posted in question 2, prepare Trial Balance.

Question 4 - Prepare General Journal for Adjustments.

Question 5 - Post General Journal prepared in question 4 to Adjustments and Adjusted Trial Balance.

Question 6 - Using Adjusted Trial Balance prepared in question 5, prepare Income Statement.

Question 7 - Using Adjusted Trial Balance prepared in question 5, Prepare Balance Sheet.