Question 2: The following related to the business of ABC Clothing, owner Ralph Peters, for the month of July 2021

July

1' Ralph contributed the following to commence ABC Clothing, cash $200,000. equipment $80,000

5' Received $20,000 fees income from cash customers

8' Purchased supplies on account from KBC Supplies for $30,000

14' Charged fees income on account to Amaya Store for $40,000

21' Paid $5,000 to account suppliers

30' Received $30,000 from account customers

31' Paid wages for the month $6,000

Required:

a) Complete the general journals.

b) Explain the application and reasons of following Accrual Accounting. Determine the income reported under accrual accounting for the month of July 2021.