Hakuna Matata started business on 1st August. The following is a list of the transactions made in the month of August:

Aug 1 Started business with Kshs 100,000 of his own cash

Aug 2 Paid Kshs 90,000 of this opening cash into a business bank account

Aug 4 Bought goods for resale on time, Kshs 7,800 from Supplier SM

Aug 5 Bought a motor cycle by cheque, Kshs 50,000

Aug 7 Bought goods for resale, paying cash Kshs 5,500

Aug 10 Sold goods on time, Kshs 9,800 to Customer DM

Aug 11 Mr. Matata took goods from inventory for his own use, cost Kshs 2,200

Aug 12 Returned goods worth Kshs 1,800 to supplier SM

Aug 19 Sold goods for cash, Kshs 2,800

Aug 22 Bought fixtures & fittings on time from KE Co Ltd, Kshs 15,000

Aug 24 Received a loan from AB Bank, Kshs 10,000 in cheque, repayable in 5 years

Aug 29 Paid supplier SM by cheque, Kshs 2,400 on account

Aug 30 Paid wages, Kshs 3,000 by bank transfer

Aug 31 Paid KE Co Ltd. In full by cheque, Kshs 15,000

Required:

(i) Enter the transactions in T-Accounts and balance off the accounts as at 31 Aug (3 marks)

(ii) Prepara a Trial Balance as at 31 Aug (2 marks)

(iii) Assume that the closing inventory is valued at Kshs 2,800. Prepare an Income Statement for the month ended 31 Aug (3 marks)

(iv) Prepare a Balance Sheet as at 31 Aug (2 marks)