Q# 1 (12 marks )

1. started business with 100,000 in cash and 50,000 inventory
2. Received bank loan 500,000
3. Purchase merchandise 100,000, paid 20,000 in cash and remaining amount will be paid next month
4. Return merchandise to suppliers 5,000
5. Purchase office supplies 10,000
6. Paid six month advance rent RS 120,000
7. Paid salary expense 100,000
8. Received six month advance fees RS.150,000
9. Sales merchandise RS 250,000 on account
10. Received from customer 100,000
11. Return merchandise from customers RS. 3,000
12. Purchase furniture on accounts

Adjustment data

1. Salary expense at the end of the year 95,000
2. Prepaid rent at the end of year 20,000
3. Unearned fees at the end of year 10,000
4. Inventory at the end of the year 35,000

Required

1. Pass general entries in standard form
2. Prepare T accounts
3. Prepare Trial balance
4. Pass adjusting entries
5. Prepare income statement
6. Prepare Balance sheet