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 Dillards 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 entitys 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 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 husbands birthday party $15,000 May 30 received commission by cheque for selling a Limited-Edition Jimmy Choo, patent leather pumps of $20,000

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REQUIRED: a) Journalize the transactions for the month. (Narrations are not necessary) (15 marks) b) Post the above transactions in the General ledger. (25 Marks) c) Extract a trial balance as May 31, 2021. (10 marks) d) Journalize the following adjusting entries using the following information: The total monthly water rate is $30,000. One employees salary was overpaid by $4,500. Investigations proved that a miscalculation occurred and the employee was indeed over paid for the month. The insurance for the shop was due and payable by May 1st. The annual premium is $48,000 and the expense is incurred monthly. This was not previously included in the transactions listed It was found that of Neiman Marcus balance, $4,000 must be written off as bad debts. Three thousand dollars ($3,000) of the Commission received was for the month of June 2021 For the first month of operation, depreciation annually is calculated at: o Building 9% Straight Line o Motor Vehicle - 15% Straight Line o Furniture 12% Straight line Note: when doing the adjusted T accounts only the accounts that have been affected need to be done (5 marks)

e) Post the above adjusting entries to their respective accounts in the general ledger creating additional accounts as the journals would dictate. (Please refer to notes re the journals) (5 marks) 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)

The Bank Statement and Cash Book (bank columns only) for Aragorn Elfin for the month of October 2020 are as follows.

Bank Statement Debit Credit Balance 2020 $ $ $ Oct 01 Balance 900 Oct 03 T. Simeon 150 1,050 Oct 07 Cash sales deposit 850 1,900 Oct 13 Vehicle loan 1,700 200 Oct 15 Standing order 1,000 (800) O/D Oct 21 Debit transfer 825 (1,625) O/D Oct 29 Rent 2,300 (3,925) O/D Oct 29 Credit transfer 4,000 75 Oct 30 Bank charges 400 (325) O/D

Cash Book (bank columns only)

2020 $ 2020 $ Oct 01 Balance b/f 900 Oct 10 Light & Power Company 180 Oct 03 T. Simeon 150 Oct 13 Vehicle loan 1,700 Oct 07 Cash sales 850 Oct 29 Rent 2,300 Oct 24 D. Elwin 500 Oct 31 Balance c/d 1,780

4,180 4,180 Nov 1 Balance 1,780 a) Prepare the updated Cash book to show the adjusted balance. (3.5 marks) b) Starting with the updated cash book balance, draw up a bank reconciliation statement for Aragorn Elfin for the month of October 2020. (3 marks)

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Question 3 Liam Carr received a bank statement for the month of October 2020 which showed a debit balance of $29,686 as at 31 October 2020. His cashbook had an overdrawn balance of $19,195 as at this date. On examining the cash book and the bank statement, the following additional information was found: i. A post-dated cheque for $6,000 received from a customer on 31 October 2020 had been entered in the cash book. ii. A cheque for $440 received from a customer had been debited twice in the cash book. iii. Three cheques drawn by the business during October 2020 had not yet been presented for payment. The amounts were as follows: $220, $460 and $1,380 iv. A cheque payment of $2,677 made to a trade creditor had been entered in the cash book as $2,766. v. Share dividends of $800 were credited directly into the bank account but had not been entered in the cash book. vi. During October 2020, the bank paid the following amounts on behalf of the business under standing orders: Subscription to a trade association $500 Office rent $4,000 vii. Owing to a casting error, the total of the credit side of the cash book had been overstated by $500. viii. A cheque of $3,000 received and banked at 30 October 2020 was not credited by the bank until 2 November 2020.

Required a) Prepare the updated Cash book to show the adjusted balance. (4.5 marks) b) Starting with the updated cash book balance, draw up a bank reconciliation statement for Liam Carr. (4 marks)