Katherine Jones sets up a small agency that markets and distributes goods. She has the following regular credit customers (Edwards, Smith and Patel) and regular suppliers of credit goods (Johnston and Singh). She has the following transactions in the first week of July.

Required:

Prepare Katherine Jones’:
(i) Ledger accounts. Balance off the income statement items on 7 July.
However, there is no need to transfer the income statement items.
(ii) Trial balance after balancing off the accounts.

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1 July Invests 195,000 equity into the business. 2 July Buys some premises for 75,000 by cheque. Buys office equipment for 9,000 by cheque. Buys goods from Johnston for 3,000 and from Singh for 1,000, both are on credit. Cash purchases of 7,000. 3 July Sales of 10,000, 9,000 and 7,000 are made on credit to Edwards, Smith and Patel, respectively. 4 July 5 July 7 July Returns 500 goods unpaid to Johnston as they were damaged. Pays wages 4,000 and bills for electricity 2,000 and telephone 1,000. Settles half of the outstanding trade payables and receives half of the money outstanding from trade receivables.