Question
Isabella Retail Store sells affordable items in the Santa Cruz area. The store was opened on 1st June 2021. The following information relates to the
Isabella Retail Store sells affordable items in the Santa Cruz area. The store was opened on 1st June 2021. The following information relates to the transactions for the first month of doing business.
June 1 Started business with a motor vehicle valuing $70,000; $50,000 cash; and a deposit of $12,000 in the business bank account.
June 2 Received a cheque representing a loan from City Bank for $125,000.
June 3 Bought equipment by cheque $25,000.
June 3 Paid a cheque for $75,000 to cover the costs of goods bought for resale.
June 5 Received cash of $52,500 for sale of goods.
June 5 Purchased an office desk on credit from S&L Office Supplies $82,500. June 6 Sold merchandise on credit to Pearly Dress Shop $62,500.
June 8 Bought goods on credit from Maxwell Designers $46,000.
June 9 Sold goods on credit to Vanessas Dress Shop $37,500.
June 11 Paid cash of $6,500 for office stationery.
June 12 Returned defective goods to Maxwell Designers which costs $3,000.
June 14 Bought goods on credit from Star Creations $16,250.
June 14 Sold goods to Dreams Department Store receiving a cheque for $62,500.
June 16 Pearlys Dress Shop settled their account with cash receiving a discount of 5%.
June 17 Deposited cash of $36,000 in the business bank account.
June 18 Vanessas Dress shop returned merchandise bought on June 9; valuing $2,700.
June 19 Paid Maxwell Designers $44,000 in full settlement of the balance outstanding by Cheque; having received a discount of $2,000.
June 20 Paid S&L Office Supplies $42,500 from personal funds.
June 22 The owner of Isabella Retail Store took merchandise for her personal use valuing $12,000.
June 25 Commission Received of $7,500 was received in cash.
June 25 Paid wages by cash $52,000.
June 27 Paid rent $22,000 by cheque.
June 27 Paid water rates $15,000 by cash.
June 27 Paid electricity $30,000 by cheque.
Required
A. Enter the transactions in the following books of original entry:
i. Sales Journal
ii. Purchases Journal
iii. Returns Inwards Journal
iv. Returns Outwards Journal
v. General Journal
vi. Cash Book
NB: Include appropriate folios and source document numbers
B. Post from the books of original entry to:
i. Sales Ledger
ii. Purchases Ledger
ii. General Ledger
C. Balance off all accounts in the ledgers and extract a trial balance.
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