Jessie Samuels, a sole trader, owns a retail shop in Brownie Town that sells a designer shoe items. She named it "Jess Come Buy". The following information relates to the transactions of Jess Come Buy for the first month of operation May 2021. May 1 started business with, cash, $50,000, motor vehicle $120,000 and building, $250,000 May 2 received a long term loan from the First Union Bank, $260,000 by cheque May 3 paid for store furniture by cheque $50,000. May 3 bought merchandise for resale by cheque $130,000. May 4 sold merchandise to Dillard's Department Store, for cash $110,000. May 5 sold merchandise on credit to New York & Co $105,000 and Nordstrom $95,000. May 6 rented Tory Burch a booth for the month of May to display their new summer arrivals, $15,000. The contract states that they will pay this amount by cash on June 5, 2021. May 7 bought merchandise on credit from Jimmy Choo $80,000. May 8 sold merchandise on credit to Neiman Marcus $65,000. May 10 bought fancy stationery with the entity's logo for cash $21,000. May 11 Being a new kid on the block, aggressive marketing and advertising was needed. Jess hired Willz Marketing Associates to advertise the business is various magazines. She paid them $60,000 cash. May 13 returned merchandise to Jimmy Choo for $6,000 receiving a credit note for these goods. May 14 purchased a Display Cabinet, (place in furniture account) on credit from Courts Ltd for $150,000 May 15 bought merchandise on credit from Manolo Blahnik $35,200. May 16 sold merchandise receiving a cheque for $135,000 May 17 New York & Co settled their account with cash receiving a 5% discount. May 17 New York & Co settled their account with cash receiving a 5% discount. May 18 lodged cash of $45,000 to the business bank account. May 19 merchandise valued at $5,500, sold on credit to Nordstrom on May 5, was returned a credit note was given to Nordstrom May 20 paid Jimmy Choo $65,000 in full settlement of the balance outstanding by cheque. The outstanding amount after payment was received as a discount. (Tip: rough check the balance re the debits and credit for Jimmy) May 22 paid electricity by cheque $60,000, water rates by cash, $25,000 and security fees of $25,000 by cheque May 25 paid staff salaries by cheque $85,000. May 28 Jessica, took some merchandise, a pair of crystal studded sandals to wear to her husband's birthday party $15,000 May 30 received commission by cheque for selling a Limited Edition Jimmy Choo, patent leather pumps of $20,000 f) Prepare an adjusted trial balance with the inclusion of the above balances (5 marks) g) Prepare the Statement of Profit or Loss and the Statement of Financial Position for the period under review. For use in the financial statements, closing stock amounts to $25,000 at the end of the month. (20 marks)
