Being a Sole proprietor, I started my business named 'POSH BOUTIQUE' on 1^st May with $10,000 as initial cash from my personal savings. It is a clothing boutique which specializes in designer ethnic and traditional wear suits designed particularly for the women to give them a cultural as well as a fashionable look.I first thought of opening a home boutique but then in order to have wider space I rented a store which is on 285 Bulletin Road, Toronto, Ontario. I started this business as a hobby and I also wanted to provide my customers with affordable yet fashionable suits. In the first few days of my business I tried to manage everything on my own but due to increasing demands I employed two workers whom I pay on the hourly basis.

Everything was getting so much messed up that I started incurring losses due to increasing expenses and I was unable to sort them out on my own. I would like to draw your attention on the following activities which will help you in preparing the financial statements of my business.

Before starting my business, I bought 500 meters of cloth piece from the wholesaler of worth $9000 total which includes 100 suits of $90 each. On 1^st May, I bought the material including threads and needles and some other stuff of worth $500 which is to be used in the manufacture of the final product. On the same day I took a loan from the bank for $10,000 total in order to cope up with these expenses. The next day, I bought 2 machines of $350 each. Bought another machine worth $350 and furniture for $2000 on 7^Th May. The rent of the store was $700 which I paid in the beginning of the month. I bought another 100 suits on May 10^th and hired two employees on seeing the rise in demand of the suits. The employees were paid monthly on $15 per hour and they work for total 50 hours per week. During the month i.e. May 15^thI managed to sell around 20 suits for $200 each. On 15^th May I borrowed another $5000 from the lender. I paid the part of borrowed money back to the lender as agreed on 18^th May. This amounted to $500. On 20^th May I invested in the shares of OKL private limited company and bought 50 shares

at the rate of $10 per share. During the month I also made expenses on the advertisement on May 20^th amounting to $500. Other small details include the rate of depreciation on machinery which is subjected to 10% and that on furniture is 15%. The sales tax is amounted to 6% and the interest rate on the borrowed money is 15%P.A. and that on the loan amount is 12%P.A.

Preapre Journal entry, trial balance, income statement, statement of change in equity and balance sheet for the month of may not year ending .