Question 1. Larkspur Furniture uses a perpetual inventory system and pays GST on an accrual basis. Larkspur engaged in the following transactions during July 2021. Transactions are inclusive of GST where relevant.

July 2 Purchased inventory for cash, $1 045

5 Purchased store supplies on credit for $495

8 Purchased inventory of $3 300 on account. Freight charges of $253, were added to the purchase invoice.

9 Sold goods for cash, $1 320. The cost of these goods was $700.

10 Received the electricity bill, $302.50.

11 Returned $220, of the inventory purchased on 8 July. It was damaged in transit.

12 Purchased inventory for cash for $3 663.

14 Sold inventory on credit terms $11 160, less a $600 quantity discount (cost, $5000). Note: GST applies after the discount.

24 Received returned inventory from the 14 July sale, $440. Larkspur Furniture had despatched the wrong goods by mistake. A credit note was issued. Larkspurs cost of the inventory received was $250. Ignore previous quantity discount.

27 Borrowed $5,000 from the bank. Signed a bill payable to the bank for this amount.

28 Purchased a computer on credit for $2,200.

REQUIRED:-

Post transaction amounts to ledger accounts and prepare a trial balance.

CHART OF ACCOUNT

203 GST collected

204 GST paid

104 Accounts receivable

402 Sales returns and allowances

150 Office Equipment

202 Bill payable