Athens Ltd is a new hairdressing business into which the owner, Mr George, invests €40,000 on 1 January, when business commences. During the first month the following transactions occur:

1. Fittings are purchased for €22,000.

2. Wages are paid to staff – €8,000.

3. Cash takings from customers of €16,000 are banked.

4. The owner takes €4,000 out of the business for himself.

5. A stylist is persuaded to lend €5,000 to the business.

6. New hairdriers are purchased for €10,000 on credit (to be paid in two months’ time).

7. The hair salon cuts and dresses hair for a number of the leading actors from a local film studio for a total price of €1,500, the bill to be paid by the studio during the next month.

You are required to:

(a) record the transactions in ledger accounts;

(b) calculate the final balance on each account at the end of the month;

(c) prepare a list of balances (trial balance);

(d) draw up a simple income statement and balance sheet as at 31 January.