Jim Keith started trading with a capital in cash of £20,000 on 1 January 2010. On the first day of business he paid £8,000 for furniture, £800 for expenses and £4,600 to purchase goods for sale. His cash sales were £2,800 and credit sales as stated on the right. By the end of the day he holds no unsold goods. Ignore depreciation.

Required:

(a) Record the transactions in appropriate books of prime entry.

(b) Post the transactions.

(c) Extract a Trial Balance at close of business on 1 January 2010.

(d) Prepare the Statement of income for the day and the Statement of financial position at close of business on that day.

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John Lyon Duncan Brown Liza Lester Ron Dyer £450 £725 £975 £845