TriSwan is a new business that started trading on 1st January 2019. As a trainee financial manager, you have been presented with a summary of transactions that occurred during the first year of trading.

Transaction Details 1 The owners introduced 75,000 of equity, which was paid into a bank account opened in the name of the business 2 Inventories totaling 18,000 were bought for cash 3 A delivery van was bought on 1/1/2019 for 18,000. This is expected to be used in the business for four years and then to be sold for 3,000 4 Premises were rented from 1/1/2019 at an annual rental of 30,000. During the year, rent of 37,500 was paid to the owner of the premises. 5 Inventories totaling 214,500 were bought on credit 6 Cash sales revenue totaled 52,500 (cost of sales 24,000) 7 Sales revenue on credit totaled 228,000 (cost of sales 111,000) 8 Receipts from trade receivables totaled 198,000. 9 Payments of trade payables totaled 181,500. 10 Rates (a tax on business premises) were paid during the year as follows: for period 1/1/2019 to 31/3/2019 - 750; for the period 1/4/2019 to 31/3/2020 - 1,800 11 Wages totaling 49,305 were incurred (wage expense) during the year. At the end of the year, the business owed 945 for the last week of the year 12 Van running expenses paid totaled 9,400 13 The electricity bill for the final quarter was not received before the accounts were prepared. The business estimated the electricity expense would be 500 for the final quarter, resulting in a total estimated electricity expense for the year of 2,475, which was paid in cash. Just before the accounts were finalised, the electricity bill for the final quarter was received for an amount of 625. The supplier will allow TriSwan to pay the balance when the next quarterly payment is due.

The business uses the straight-line method for depreciating non-current assets. Required: i. Record the transactions using double-entry bookkeeping* and prepare a trial balance. ii. Financial statements are a vital communication tool for key stakeholders. Discuss this statement considering the role of financial record keeping in the survival and growth of small businesses.