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Homework answers / question archive / The Company started started its business boy issuing 10,000 share for es each

The Company started started its business boy issuing 10,000 share for es each

Accounting

The Company started started its business boy issuing 10,000 share for es each. The share money received were deposited into the bank account. 02 Jan 2019 The Company hired a staff with the following salary pakages Accountant E 1500/- a month Operatonal Staff E 5000/- 2 month persons, E3,000 each Helping staff E 2000/ a month (4 (ersons, ESO, each person) 04 Jan 2019 - The company purchased inventory for £10,000 paying E5,000 in cash and and remaing £5,000 on credit from Fulton Ltd. 08 Jan 2019 - The Company purchased Office Equipments for £15,000/-on credit from Index Furniture 10 Jan 2019 - The Company purchased Computers for its employees costing 5000 and paid through cheque 11 Jan 2019 - The Company Leaased a delivery van from the bank, the market value of the car is £20,000 and company paid 20% down payment. Monthly intallments are (1,000 a month to be paid at the end of the month, 5% interest is included in the installment payment 12 Jan 2019 - The company received its first order from the client BZD Ltd. for £2,500, goods delivered to the client and received a cheque and banked it. The o company sets all its inventory at a profit margin of 40% 15 Jan 2019 - The Company paid E500 for the fuel and repair and maintenance of the delivery van. 18 Jan 2019 - The Company received another oder for E1500 from Zayabled. Goods delivered and cheque received and hanked. 25 Jan 2019 - Cheque paid to Index Furniture for £10,000 0 31 Jan 2019 Accrued Office Rent 1,000 1 31 Jan 2019 - Paid monthly installment of the delivery van. 2 31 Jan 2017 Accrued utlities for the month of Jan for £1,000 31 Jan 2017 - Accrued Salaries & Wages for the month. You are required to: 25 56 1. Record journal entries to approriate chart of accounts 2. Prepare Ledger accounts 4. Prepare trial balance as at 31 Jan 2019 22 20

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Journal Entries for the given transactions are as follows:

Date Particulars Debit Credit
1-Jan Cash £ 50,000.00  
  Common Stock   £ 50,000.00
  (Shares issued = 10,000 shares x 5 £ = £ 50,000)    
       
  Bank £ 50,000.00  
  Cash   £ 50,000.00
  (Money received transferred to bank)    
       
4-Jan Inventory £ 10,000.00  
  Cash   £    5,000.00
  Accounts payable   £    5,000.00
       
8-Jan Furniture £ 15,000.00  
  Index Furnitures   £ 15,000.00
  (Furniture purchased on credit)    
       
10-Jan Computers £    5,000.00  
  Bank   £    5,000.00
  (Computers purchased for employees)    
       
11-Jan Right to use asset - Delivery Van £ 20,000.00  
  Bank   £    4,000.00
  Lease Liability   £ 16,000.00
  (Asset acquired on lease by paying 20 % down payment, Lease payment £ 1000)    
12-Jan Bank £    2,500.00  
  Sales   £    2,500.00
       
  Cost of goods sold £    1,500.00  
  Inventory   £    1,500.00
  (£2500 x (100 - 40% profit margin) = £1500)    
       
15-Jan Repair and maintenance expense £        500.00  
  Cash   £        500.00
       
18-Jan Bank £    1,500.00  
  Sales    
       
  Cost of Goods sold £        900.00  
  Inventory   £        900.00
  (£1500 x (100 - 40% profit margin) = £900)    
       
25-Jan Index Furniture £ 10,000.00  
  Bank   £ 10,000.00
       
31-Jan Rent Expenses £    1,000.00  
  Rent Payable   £    1,000.00
       
31-Jan Lease liability £        200.00  
  Interest Expense £        800.00  
  Bank   £    1,000.00
  (Interest Expense = £ 16000 x 5% = £ 800)    
  (Principal repaid = £ 1000 - £ 800 = £ 200)    
       
31-Jan Utilities Expense £    1,000.00  
  Utilities payable   £    1,000.00
       
31-Jan Salaries Expense £    8,500.00  
  Salaries Payable   £    8,500.00
  (Salaries : £ 1500 + £ 5000 + £ 2000 = £ 8500)    
       

The ledger accounts are as follows:

Cash
Particulars (Debit) Amount Particulars (Credit Amount
Common Stock £       50,000.00 Bank £   50,000.00
Total £       50,000.00 Total £   50,000.00
Common Stock
Particulars (Debit) Amount Particulars (Credit Amount
Balance carried forward £ 50,000.00 Cash £ 50,000.00
Total £ 50,000.00 Total £ 50,000.00
Bank
Particulars (Debit) Amount Particulars (Credit Amount
Cash £       50,000.00 Computers £      5,000.00
Sales £         2,500.00 Right to use asset - Delivery Van £      4,000.00
Sales £         1,500.00 Inventory £      5,000.00
    Repair and maintenance expense £         500.00
    Index Furniture £   10,000.00
    Lease liability £         200.00
    Interest Expense £         800.00
    Balance carried forward £   28,500.00
Total £       54,000.00 Total £   54,000.00
Inventory
Particulars (Debit) Amount Particulars (Credit Amount
Bank £    5,000.00 Cost of goods sold £    1,500.00
Accounts payable £    5,000.00 Cost of Goods sold £        900.00
    Balance carried forward £    7,600.00
Total £ 10,000.00 Total £ 10,000.00
Accounts payable
Particulars (Debit) Amount Particulars (Credit Amount
Balance carried forward £         5,000.00 Inventory £      5,000.00
Total £         5,000.00 Total £      5,000.00
Furniture
Particulars (Debit) Amount Particulars (Credit Amount
Index Furnitures £ 15,000.00 Balance carried forward £ 15,000.00
Total £ 15,000.00 Total £ 15,000.00
Index Furnitures
Particulars (Debit) Amount Particulars (Credit Amount
Bank £       10,000.00 Furniture £   15,000.00
Balance carried forward £         5,000.00    
Total £       15,000.00 Total £   15,000.00
Computers
Particulars (Debit) Amount Particulars (Credit Amount
Bank £    5,000.00 Balance carried forward £    5,000.00
Total £    5,000.00 Total £    5,000.00
Lease Liability
Particulars (Debit) Amount Particulars (Credit Amount
Bank £        200.00 Right to use asset - Delivery Van £ 16,000.00
Balance carried forward £ 15,800.00    
Total £ 16,000.00 Total £ 16,000.00
Right to use asset - Delivery Van
Particulars (Debit) Amount Particulars (Credit Amount
Bank £         4,000.00    
Lease Liability £       16,000.00 Balance carried forward £   20,000.00
Total £       20,000.00 Total £   20,000.00
Repair and maintenance expense
Particulars (Debit) Amount Particulars (Credit Amount
Bank £        500.00 Balance carried forward £        500.00
Total £        500.00 Total £        500.00
Sales
Particulars (Debit) Amount Particulars (Credit Amount
    Bank £     2,500.00
Balance carried forward £     4,000.00 Bank £     1,500.00
Total £     4,000.00 Total £     4,000.00
Cost of goods sold
Particulars (Debit) Amount Particulars (Credit Amount
Inventory £         1,500.00    
Inventory £             900.00 Balance carried forward £      2,400.00
Total £         2,400.00 Total £      2,400.00
Rent Payable
Particulars (Debit) Amount Particulars (Credit Amount
Balance carried forward £    1,000.00 Rent Expenses £    1,000.00
Total £    1,000.00 Total £    1,000.00
Rent Expenses
Particulars (Debit) Amount Particulars (Credit Amount
Rent Payable £         1,000.00 Balance carried forward £      1,000.00
Total £         1,000.00 Total £      1,000.00
Utilities Expense
Particulars (Debit) Amount Particulars (Credit Amount
Utilities payable £    1,000.00 Balance carried forward £    1,000.00
Total £    1,000.00 Total £    1,000.00
Interest Expense
Particulars (Debit) Amount Particulars (Credit Amount
Bank £             800.00 Balance carried forward £         800.00
Total £             800.00 Total £         800.00
Utilities payable
Particulars (Debit) Amount Particulars (Credit Amount
Balance carried forward £         1,000.00 Utilities Expense £      1,000.00
Total £         1,000.00 Total £      1,000.00
Salaries Expense
Particulars (Debit) Amount Particulars (Credit Amount
Salaries Payable £    8,500.00 Balance carried forward £    8,500.00
Total £    8,500.00 Total £    8,500.00
Salaries Payable
Particulars (Debit) Amount Particulars (Credit Amount
Balance carried forward £    8,500.00 Salaries Expense £    8,500.00
Total £    8,500.00 Total £    8,500.00

The relevant trial balance is as follows:

Particulars Debit Credit
Cash $0  
Bank £ 28,500.00  
Furniture £ 15,000.00  
Computers £    5,000.00  
Right to use asset - Delivery Van £ 20,000.00  
Inventory £    7,600.00  
Accounts payable   £    5,000.00
Lease Liability   £ 15,800.00
Rent Payable   £    1,000.00
Utilities payable   £    1,000.00
Salaries Payable   £    8,500.00
Index Furnitures   £    5,000.00
Common Stock   £ 50,000.00
Sales   £    4,000.00
Cost of goods sold £    2,400.00  
Repair and maintenance expense £        500.00  
Utilities Expense £    1,000.00  
Interest Expense £        800.00  
Salaries Expense £    8,500.00  
Rent Expenses £    1,000.00  
     
Total £ 90,300.00 £ 90,300.00

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