QUESTION 1

ABC laundry was opened on January 2020 by Ahmed. During the first year of operations, the

following transactions occurred:

1. Shareholders invested OMR 2,000 cash in ABC laundry and the business issued common shares to them.

2. Paid OMR 1,000 cash for rent.

3. Purchased washers and dryers from Rashid Store for OMR 2500, paying OMR 1,000 in cash and OMR 1,500 on credit.

4. Paid OMR 120 for cleaning supplies.

5. Paid employee salaries of OMR 250.

6. Performed services on account for a nearby tailor, OMR 620.

7. Paid a OMR 70 cash dividend to shareholders.

8. Cash receipts for laundry services performed to Ahmed were OMR 500.

9. Paid employee salaries of OMR 250.

10. Utilities payable of OMR 120 at the end of the year.

11. Paid income tax of OMR 60.

Instructions:

(a) Journalize the above transactions.

(b) Open T accounts and post the transactions in the ledger.

Note:Show all your calculation and workings.