2. ABC company transactions The financial year of ABC ends January 31. On December 31, 2017 ABC has a bank (checking account) balance of 100,000 and 50,000 in equity and long-term debt each. The VAT rate is 15% straight-line depreciation ABC uses a) Prepare journal entries for the following transactions: (1) ABC rents a small store for 1,750 (no VAT) per month. The property owner requires 3 months' rent paid in advance. ABC pays with a check on January 2. (2) ABC buys furniture for 5,000 (net) and office supplies for 250 (net) on account on January 5. The useful life of the furniture is 5 years. (3) ABC buys further equipment for 10,000 (net). The equipment is delivered right away. Half of it is paid with a check upon delivery on January 9. The rest is due in 30 days. The useful life of the equipment is 5 years. (4) ABC buys supplies (inventory) for 10,000 (net) on account on January 10. On January 11, ABC welcomes its first customers 2018. ABC bills a total of 500 (net) to the customer who pays in full at the time (bank transfer) (5) (6) Both the furniture and the office supplies (2) are paid on January 20. ABC pays half of the supplies (4) on January 23. (7) (8) During the month, ABC bills an additional 12,000 net. Half of the sales are on credit; the other half are paid by bank transfer. At the end of the month, ABC has outstanding receivables of 4,600 (gross). (9) At the end of the month ABC pays its employee. The gross pay is 2,000. 425 are withheld for taxes and both the employee and ABC pay 400 (each) for social security (10) Miscellaneous expenses (including utilities) total 6,000 (net) for January. All expenses are paid by bank transfer. Assume the full rate of VAT is due for miscellaneous expenses. (11) Journal the adjusting entries for il PP&E (depreciation) Cost of goods sold: the ending balance of inventory is 8,00o ii) ii) Accruals and deferrals b) What is the ending bank account balance? c) What is the profit/loss for January