Question 1

Betty Beauty commenced business on 1 May 2021 with a capital of $6,000 of which $1,000 was in cash and $5,000 in a bank current account. The transactions during

May 2021 were as follows:

2 May Paid rent of $750 by cheque

5 May Paid wages of $120 in cash

8 May Purchased goods for $1,380 by cheque 10 May Sold goods for $650 in cash

15 May Bought goods on credit for $830 from Mary So

18 May Sold goods on credit for $1,250 to Kelvin Lee 20 May Bought shop fittings of $2,500 by cheque

23 May Paid rates of $325 in cash

25 May Paid electricity of $230 by cheque

30 May Bought stationery of $90 in cash

31 May Received a cheque for $500 from Kelvin Lee

Required:

(a) Record the above transactions in the ledger of Betty Beauty and then balance off the accounts at the month end of May 2021.

(b) Extract a trial balance as at 31 May 2021.