Question 1

Use the following information to record the following accounts using perpetual inventory system: (15 Marks)

Trading inventory on 1 March 2018 $20 000

Transactions for the year ended 28 February 2019:

Goods purchased for cash $ 60 000

sales of goods for cash ( at cost plus mark-up of 50%) $75 000

(i) Trading inventory account

(ii) Sales account

(iii) Cost of sales account

(iv) Trading account

(v) Profit and loss account

Question 2

Complete the following table assuming the business uses perpetual inventory system. indicate the account to debit and the account to credit and show the effect on the accounting equation. The first is done for you as an example.

Transaction	Account debit	Account credit	Asset	Owners equity	Liability
Credit purchase of goods	Trading inventory	Creditors control	+	0	+
Cash purchase of goods.
Cash sale of goods
Credit sale of goods
Goods returned to creditors
Goods returned to debtors
Goods donated by the business