QUESTION ONE

We Send Couriers was established on January 1. The following transactions occurred during the companys most recent quarter.

• Jan 1. Issued common stock for K80,000 cash.
• Jan 2. Purchased equipment costing K82,000 financed by a long term loan from Cashrite for the full amount.
• Feb 7. Provided delivery service to customers, K72,000 in accounts receivable and K16,000 in cash.
• Feb 18. Incurred repair costs of K3,000 on account from J Motors.
• Mar 12. Collected K65,000 cash from customers on account.
• Mar 20. Borrowed K90,000 by signing another long-term loan from Cashrite.
• Mar 25. Paid K74,400 cash for equipment rentals during the quarter.
• Mar 25. Paid employees K38,000 cash for work done during the quarter.
• Mar 26. Paid (with cash) K49,000 fuel for delivery equipment used during the quarter.
• Mar 28. Paid K2,000 cash on accounts payable.
• Mar 30. Ordered, but havent yet received, K700 in supplies.

Required:

1. Open the appropriate books of original entry and record the above transactions.

[10 Marks]

2. Open the appropriate ledger accounts and post the accompanying transactions and close off at the end of the accounting period.

[10 Marks]

3. Close off the accounts and prepare the Trial Balance as at 31 March.

[10 Marks]

4. Prepare the Income statement and the statement of Financial Position for the quarter end.

[10 Marks]