Reference no: EM132561441

Question - Andrew Joel is a market trader, he opened a business named Joel Co. The company's Trial balance as at 1 December 20X8, appears below:

Inventory 5,000

Equipment 3,700

Payables 500

Receivables 300

Cash at Bank 1,200

Capital ?

During December, Andrew Joel:

1. Transferred $300 of his savings into a business bank account

2. Received loan from D.Watson, $100 cheque, repayable in 5 years

3. Bought goods for resale on time, $320 from S.Holmes

4. Bought a motor van by cheque, $500

5. Goods returned to S.Holmes, $20

6. Sold goods to AB Ltd valued $1,000, customer paid by cheque $400

7. A Joel took goods from inventory for his own use, cost $220

8. Sold motor van no longer required for $500 on credit to K.Lamb

9. Purchased goods from C.Swiff $500, less 10% trade discount, pays by cheque

10. Paid $120 to hire a van for December, using debit card

11. Paid staff wages for December, $210 cheque

Requires -

a. Calculating the balance of Capital account as at 1 December, 20X8.

b. Record all the transactions using double entries and ledger accounts (T-accounts).

c. Prepare Trial Balance as at 31 December 20X8.

d. Assuming that Inventory on 31 December 20X8 is $5,130. Prepare Income Statement for the period.

e. Prepare Balance Sheet as at 31 December 20X8.