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MNO Ltd. has the following transactions for the month of June 2023: June 1: Purchased inventory on account for $10,000. June 5: Sold goods costing

MNO Ltd. has the following transactions for the month of June 2023:

  • June 1: Purchased inventory on account for $10,000.
  • June 5: Sold goods costing $5,000 for $8,000 on account.
  • June 10: Paid $500 for advertising expenses.
  • June 15: Collected $3,000 from customers on account.
  • June 20: Paid suppliers $4,000.
  • June 25: Declared and paid dividends of $1,000.

Requirements:

  1. Record the journal entries for the transactions.
  2. Post the journal entries to the ledger.
  3. Prepare a trial balance as of June 30, 2023.
  4. Prepare an income statement for June 2023.
  5. Discuss the significance of the cash flow from operating activities.

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