Eric Toure , a sole trader , commenced business on 1st January 2005 with $ 20,000 banked into the business bank account . During the year , he made the following transactions ; Withdrew $ 1,500 cash from the bank for personal use . Further capital introduced was $ 5,000 banked into the business bank account . Purchases of goods for resale and paid by cheque : $ 8,000 . Eric sold goods to BM Ltd for $ 28,050 on credit for two months . 2,500 of wages were paid by cash . BM Ltd returned goods to Eric : $ 550 . A Motor vehicle was purchased from Motors Ltd for $ 20,000 on credit . Pais shop rent by bank transfer : $ 1,200 . 60% of the amount due Motors Ltd was paid by cash . BM Ltd paid 90 % of arrears by cash .

Additional information includes ;

Bad debt 400

Return outwards 600....

Interest on loan ..... 1000

Salaries ........... 3050

Discount received ...... 890

Provision for doubtful 450

debts Discount allowed ... 720

Stock 1/1/2005 .... 2800

Advertising .......3800

Carriage inwards .....2350

Investment income500 ..

Lighting and heating .. 4330

Bank overdraft 14900..

Carriage outwards . 300

Loan . 10000

Bank charges 240

Insurance .. 350

Investment 8000

Required:

A. Open ledger accounts to record the transactions and balance of the accounts .

B. Prepare a trial balance as at 31 December 2005. (30 mar )