Reference no: EM132979457

John runs his business as a sole trader. At the beginning of the reporting period he invested £6,000 in his business, paid in cash. The balances of the following nominal ledger accounts as at the end of the reporting period are provided bellow:

£
Purchases account 6,000
Rent expense account 2,600
Sales account 14,200
Bank loan interest account 580
Other expenses account 1,400
Drawings 2,100
Suspense account 850

• An amount of £850 was credited on the bank statement and automatically entered in the cash at bank account by the computerised accounting system, but it could not match the amount to a known transaction and a credit entry was made to the suspense account.

Required:

Problem 1. Provide the journal entry to close the Suspense account.

Problem 2. Provide the journal entries to close the income and expense ledger accounts.

Problem 3. Provide the journal entry to close the Profit and loss ledger account.

Problem 4. Provide the journal entry to close the Drawings account.

Problem 5. Provide the balancing figure (balance carried down) of the Capital ledger account.