Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Michael owns and manages a small business which sells organic beauty products to high street shops. Michael sells to the shops on credit at 3

Michael owns and manages a small business which sells organic beauty products to high street shops. Michael sells to the shops on credit at 30 days credit terms. (Michael manages all aspects of the business, including ordering, delivery and managing the accounts.) The business accounts are balanced at the end of each month, and the transactions are posted daily.On 1 July, the balances on Michaels general ledger accounts were as follows:Account nameDebit ()Credit ()Capital 63,000Van (at net book value)30,000Bank1,500 Receivables control62,000 Payables control 30,50093,50093,500On 1 July, the debit balances on the receivables ledger accounts were as follows:Receivables ledger accountsShampoo5,910Soap23,520Shower Gel32,570Total62,000On 1 July, the credit balances on the payables ledger accounts were as follows:Payables ledger accountsLemon4,601Rose25,899Total30,500During July, the following transactions took place:No.DateAmount ()Transaction12 July5,200Michael pays the business rent from his personal bank account24 July2,800Michael receives payment from shop Shampoo in part settlement of amounts outstanding38 July9,000Michael sells goods to shop Soap on 30 days credit terms49 July32,570Michael receives payment from shop Shower Gel in full settlement of the amount outstanding511 July10,900Michael purchases goods from supplier Lemon on 30 days credit terms617 July11,200Michael pays to supplier Lemon by bank transfer in part settlement of amounts outstanding722 July25,899Michael pays by bank transfer the full amount outstanding on the account of supplier Rose828 July11,000Michael sells goods to shop Shampoo on 30 days credit termsRequired:a.Set out Michaels general ledger accounts and the receivables and payables ledger accounts on 1 July.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

5th Edition

0273651560, 978-0273651567

More Books

Students also viewed these Accounting questions