Reference no: EM133173379
Question - Bart Ashman is a sole proprietor of a newly renovated wholesale and retail variety store. He commenced business on June 1, 2021. The following transactions took place during the month of June.
June 1 Bart invested the following assets into the business: cash, $105,000; fixtures and fittings $36,000 and a bank balance of $33,000.
June 2 Bought goods on credit from James Love $10,500, Kerry Bell $16,000 and Daniel Bryan $19,500 and Xian Clarke $26,000.
June 2 Paid rent for June by cheque $15,000.
June 3 Bought a cash register from Singer Jamaica on credit valuing $25,000. June 3 Cash purchases $35,000. June 4 Sold goods for cash to Stacy Dash $19,000.
June 5 Bought stationery for cash $1,400.
June 4 Sold goods on credit to Ahmar Jones $56,000, Willy Lake $45,000, Betty Cox $35,000.
June 6 Ahmar Jones settled his account paying by cash and received a 4% cash discount.
June 6 Goods valued at $1,700, sold to Willy Lake on June 4, was returned to us.
June 7 Sold goods on credit to Tom Cruz Ltd $35,000.
June 9 The following debtors settled their accounts by cheque: Willy Lake and Betty Cox. Both were given a 5% cash discount.
June 9 Purchased delivery van on credit from Jus Sales Ltd. for $150,000.
June 12 Paid wages by cash $18,500.
June 13 Returned goods valuing $1,500 to Daniel Bryan as they were the incorrect item.
June 15 Bought goods on credit from Carson Willis $11,750.
June 17 Lodged cash of $12,500 to the business bank account
June 19 Paid Kerry Bell $15,500 for full settlement of the balance outstanding by cheque having received a discount of $500.
June 22 Tom Cruz paid us $32,000 of the amount owed to us by cash and we gave him a 3% cash discount. June 23 We paid the following creditors the amounts owed to them by cheque: Daniel Bryan, $18,000 and Xian Clarke $26,000. We received a 5% cash discount for early payment.
June 25 Commission was received by cash, $16,000 from Arizona Nets.
June 27 Purchased goods on credit from Kerry Bell for $10,450. June 30 Paid utilities by cash $15,900, insurance $12,000 by cheque.
Required -
(a) Prepare the Journal entries for each of the above transactions. Narratives are not required.
(b) Post all the above transactions to their respective ledger and the three-column cash book.
(c) Extract an unadjusted trial balance with the inclusion of the appropriate headings.
(d) Post the adjusting entries below to the Journal and their respective ledgers.
? Wages were prepaid by $1,900 for the month of June.
? Rent was accrued by $2,400 at the end of the month.
? For the first month of business, depreciation is calculated at 6% per annum on the straight-line basis on the cash register. Fixtures and fittings and the delivery van is calculated at a rate of 5% per annum; depreciation is charged to the accounts on a monthly basis.
? It appears that the balance owed by Tom Cruz has to be written off as a bad debt.
Note: when posting the adjustments in the ledgers, only the accounts that have been affected needs to be adjusted and shown.
(e) Prepare the adjusted trial balance with the inclusion of the above and any new accounts opened.
(f) Prepare the Statement of Profit or Loss and Statement of Financial Statement for the period under review. Please include the appropriate headings. For use in the financial statements, closing stock amounts to $15,915 at the end of the month.