J. Ballantine has the following opening balances on her ledger accounts:

The following transactions take place during the reporting period.
1. Bought desks for £500 by debit card
2. Paid wages of £2,000 by BACS
3. Lodged sales of £25,000, received in cash
4. Sold £5,000 goods on credit to R. Eagle
5. R. Eagle returned £1,000 worth of goods.
6. R. Eagle paid £2,500 by bank transfer
7. Bought a new bookcase for £500 by cheque
8. Repaid £5,000 of the loan account
9. Purchased goods from G. Crow for £12,000
10. Returned goods to G. Crow worth £1,500. They were not fit for purpose
11. Paid G. Crow £8,000 by bank transfer
12. Bought a new car for £10,000. Got an extension to the bank loan to pay for this
13. The bank charged £1,000 interest on the loan for the period.
14. The owner withdrew £500 cash from the bank for his own use.

Required
a. Use the accounting equation to determine the opening capital balance.
b. Open T accounts to record the opening balances and post the 14 transactions.
c. Close the T accounts at the end of the period and extract the trial balance.

Transcribed Image Text:

Trade receivable: R. Eagle Office equipment Bank overdraft Trade payable: G. Crow Loan £ 2,000 20,000 4,000 1,000 20,000