ABC Hardware Store had the following transactions during the year starting January 1, 2020. At the beginning of 2020, the ledger of ABC showed Cash of 5,000 SR, opening inventory 3000 SR (300 units at 10SR per unit) and Owners Capital of 8,000 SR. (ABC Co. uses the FIFO method in inventory valuation).

1. ABC invested 20,000 SR cash in the business.
2. Purchased a used truck for 8,000 SR, paying 4,000 SR cash and the balance on account.
3. Paid 1,800 SR cash on a 1-year insurance policy effective January 1.
4. Paid 2,900 SR cash on amount owed on truck.
5. Paid 2,800 SR cash for employee salaries.
6. Paid 350 SR for the gasoline bill for the truck.
7. Withdraw 3000 SR cash for personal use.
8. On April 1, ABC purchased 500 units from Nasr Co., a supplier, for 15 SR per unit with a settlement discount of 5% if it paid the price within 10 days from the date of purchase.
9. On July 15, ABC purchased 700 units from El-Noor Co., a supplier, for 17 SR per unit with a settlement discount of 5% if it paid the price within 10 days from the date of purchase.
10. On August 1, ABC sold 600 units to Sami Co. at a price of 30 SR per unit with a settlement discount of 4% if the price is received within 10 days from the date of sale. (The company is not expecting the customer to take the advantage of the discount).
11. On April 6, ABC paid the full amount due to Nasr Co.
12. On August 15, ABC paid the full amount due to El-Noor Co.
13. On November, 5, Sami Co. paid the full amount due to ABC Co.
14. On October 1, ABC sold 100 units at 28 SR per unit to Nora Co. that paid the price in full at the time of the transaction.

PART TWO

The following transactions require adjustments in the trial balance. Prepare the adjusted trial balance.

1. Depreciation on equipment for the year was 500 SR.
2. Half of the insurance is relevant to next year.
3. Accrued but unpaid employee salaries were 1,000 SR.
4. ABC Co. rents out a property for 100 SR per month. 1500 SR was received in the year ended December 31, 2019
5. ABC has a bank deposit in which it receives an interest income of 100 SR per month. At year-end, it is found that ABC received 600 SR in total.

Instructions (for both parts):

1. Journalize and post the 2021 transactions.
2. Prepare a trial balance on December 31.
3. Prepare an adjusted trial balance on December 31.
4. Prepare the income statement and owners equity statement for 2021 and a classified balance sheet at December 31, 2021.

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