The following information relates to Shelby Simms business for the month of June, 2020:

Jun. 1 Ms. Simms books showed the following balances brought forward from May 31^st, 2020; Loan (Due 2024) $2,500,000; Cash $1,500,000; Inventory $350,000; Bank $900,000; Land and building $2,000,000; Motor vehicle $950,000

Jun. 2 Paid rent for June by cheque $120,000.

Jun. 3 Purchased of office furniture by cheque $150,000.

Jun. 3 Bought goods by cheque $175,000.

Jun. 4 Sold goods for cash $800,000.

Jun. 5 Sold goods on credit to Kemp $100,000.

Jun. 5 Sold goods on credit to Jane $25,000.

Jun. 6 Kemp settled his account with cash receiving a 5% cash discount.

Jun. 6 Jane returned $10,000 worth of goods

Jun. 7 Bought goods on credit from Masters $250,000.

Jun. 10 Bought stationery for cash $35,000.

Jun. 11 Paid wages by cash $95,000.

Jun. 13 Returned goods to Masters $50,000.

Jun. 15 Bought goods on credit from Generals $166,000.

Jun. 16 Sold goods for cash $100,000

Jun. 18 Lodged cash of $60,000 to the business bank account.

Jun. 20 Paid Masters by cheque in full settlement of the balance outstanding

having received a discount of $3,000.

Jun. 23 Purchased equipment by cheque $170,000.

Jun. 25 Paid staff salaries by cheque $40,000

Jun. 26 Commission Received $90,000 by cheque.

Jun. 27 Purchased goods on credit from Sills for $85,000.

Jun. 30 Proprietor withdrew Cash of $20,000 for personal use.

REQUIRED:

1. Journalize the transactions for the month. (26 marks)
2. Post the above transactions in the relevant ledgers (45 marks)
3. Extract a trial balance as at June 30 2020. (13 marks)
4. Prepare an adjusted trial balance with the following information:

• The Closing Inventory at cost is $400,000. (Do not Journalize)
• The monthly rental expense is $100,000.
• One employee complained that their salary was short by $2,000. Investigation proved that the employee was indeed short paid for the month.
• The Loan has an interest rate of 12% per annum (1% per month) which has not yet been accounted for.
• Insurance of $50,000 per month for the motor vehicle has not yet been paid.
• Depreciation for the motor vehicle has not been taken into account. The business uses the straight line method at a rate of twenty percent (24%) per annum (2% per month).

NB Show the Ledger and Journal Entries for each Adjusting Entry. (23 marks)

5. Prepare the Income Statement and Balance Sheet for the period under review. (40 marks)
6. Briefly comment on the performance of the business. (3 marks)