1. After having returned from his summer holidays on 1 September 2020, Mr. Willis, the owner of the World Wide Trading, decided to follow the advice of his accountant to start keeping his records based on the double entry system. At that date his assets and liabilities were as follows:

Equipment and fixtures	100,000
Inventory	75,000
Balance at Bank	87,500
Cash	1,875
Accounts Payable - Bright	15,875
- Li	1,000
- Shah	2,500

Willis transactions during September were as follows:

Sept 1. Sold goods to Sangster plc, original cost 1,000, for cash 10,000 Sept 2. Bought goods for resale, on time from Eastern Corp. 5,000

Sept 3. Sold goods to Retailers Inc. on time, original cost 500, for 3,000 Sept 4 Bought Fittings and fixtures from Sangster plc, for 7,000

Sept 5. Paid the balanced owed to Bright at 1 March less a cash discount of 2,5% Sept 6. Paid Eastern Corp. the full amount due by cheque

Sept 17. Received full amount due from Retailers Inc. by cheque Sept 20. Paid Sangster plc. By cheque after deducting 2% cash discount Sept 30. Paid by bank 20,000 for repairs to distribution vehicles

Required: -Use no more than 300 Words

1. Open World Wide Trading ledger accounts at 1 September, record all transactions for the month, balance the ledger accounts, and prepare a trial balance as at 30 September
2. Explain how you will treat the beginning of the year (opening balances) of the assets and liabilities as shown in this question
3. Consistent with the concepts learned in this aspect, explain the purpose of creating ledger accounts
4. Explain how you determined the entries in terms of debit and credit in the respective ledger accounts
5. Explain the double entry principle and explain its relevance in answer (a)