I Am The Trend was started on January 2, 2021 by Michael Pearson as a sole proprietorship business. The business trades in an array of coloured and custom made graphic T-shirts. The mission statement of the business is Dream it, wear it, live it. Michael Pearsons goal is to provide high-quality inexpensive T-shirts for his customers.

Today is 10 Feb 2021, and you have been asked as his junior accountant to prepare a complete set of books for the first month of the year and have been presented with the following business transactions for the month:

Date	Transactions
2-Jan	Started business with $150,000 in cash.
2-Jan	Opened a business bank account and deposited cash of $35,000
3-Jan	Rented a shop in the Port Arcade paying by cash, $16,000.
10-Jan	Purchased the following T-Shirts on credit: Invoice number TLAB101
	5 White coloured for $300 per shirt
	5 Army Green coloured for $400 per shirt
	5 Navy Blue coloured for $400 per shirt.
	5 Burgundy coloured for $400 per shirt.
	5 Black coloured for $300 per shirt.
	5 Royal Blue coloured for $400 per shirt.
13-Jan	All the shirts bought on January 10, 2021 were taken to 'Hot Off The Press' to have the word EXTREME printed on the front of each T-shirt. The printing cost was paid in cash, $1,200 per shirt.
15-Jan	Paid Tees Limited a cheque for the T-shirts bought on January 10, 2021. Tees Limited offered 2.5% settlement discount if payment is made within 7 days of having received the goods.
18-Jan	Purchased a Cash Register for $14,500 cash.
21-Jan	Sold three (3) White T-shirts $3,000, each. A cheque was received for the sales.
22-Jan	Sold the following T-shirts on credit to The Tivoli Garden High School Dance Society: Invoice number IAM01
	1 White - $3,000 per shirt
	1 Black - $3,000 per shirt
	2 Navy Blue - $4,000 per shirt
	3 Army Green - $4,000 per shirt
	1 Royal Blue - $4,000 per shirt
28-Jan	Sold 5 Burgundy T-shirts for cash. Each was sold for $4,000 per shirt.
29-Jan	We received a cheque from the Tivoli Garden High School for the purchase made on January 22, 2021. We allowed them a discount of 1.5% for having made within 10 days.
30-Jan	Sold on 3 Black T-shirts on credit for $3,000 each to Marlene Palmer Variety Store. Invoice number IAM02
31-Jan	Marlene Palmer returned one the T-shirts sold to her due to spelling error. Note Number CR003

Additional Information:

1. The closing inventory of T-shirts at January 31, 2019, was valued at $4,500.
2. At the end of January 31, 2019, rent of $6,500 was paid in advance for February and March of the following year.
3. The electricity and telephone bills were due but remained unpaid as at January 31, 2019. The amounts were $1,500 and $1,000 respectively.
4. All T-shirts were bought from Tees Limited.
5. Please use the invoice/note numbers as indicated in the relevant transactions.

Required:

1. Record the above transactions in the appropriate books of original entry for the month of January 2021.

15 marks

2. Post to and balance off the accounts in the relevant ledgers.

20 marks

3. Extract a trial balance.

20 marks

4. Prepare an income statement at the end of the first month of the year. 25 marks

Prepare a statement of financial position as at 31 January 2021.