You have the following information for John’s store for fiscal year 20X0:

January:

1st Invest 15.000 in cash to open up the store, also sign a 3-months rental contract for the store (@500 per month and pay full in advance)

3rd Purchase goods at cost of 3.000 by cash

5th Purchase vending machine at cost of 5.000 on credit (Depreciation is estimated @$50 per month)

6th Sell goods @3.500 and receive cash (the mount of good originally costs 2.500)

11th Pay for the vending machine by cash (@5.000)

17th Invest more 5.000 in cash to the business

20th Deposit 8.000 cash to open-up a bank account

26th Purchase goods at cost of 10.000 on credit

31st Sell goods (which originally cost 7.000) @9.000 on credit.

February:

1st Hire a sale assistant @700 per month, salary is paid at the end of each month. Also, purchase an insurance contract for the vending machine (@50 per month, the length of the contract is 12 months and cash pay full in advance).

2nd Invest more 3,000 cash into the business.

5th Purchase goods at cost of 5.000 on credit.

12th Make a payment of 7.000 cash to supplier of goods.

18th Sell goods (which originally cost 5.000) @3.000 in cash (due to an impairment of the quality of sold goods).

20th Borrow 1.000 cash from bank.

25th Sell goods (which originally cost 2.000) @3.000 and 50% of this is received in cash (the rest is on credit).

28th Pay salary (@50 cash) for sale assistant.

Requirement:

a) Record the transactions in January and prepare Trial Balance for the month

b) Record the transactions in February and prepare Trial Balance for the month.

c) What is the closing balance of COGS Account at the end of Jan and Feb?

d) What is the closing balance of Cash Account at the end of Jan and Feb?

e) What is the NBV (Net Book Value) of the vehicle at the end of Jan and Feb?

f) What is the closing amount of Owner’s Equity as of 31st Jan?

g) What is the closing amount of Owner’s Equity as of 28th Feb?

Answer rating: 100% (QA)

January Transactions Date Transaction Description Cash Vending Machine Goods Inventory Accounts Paya... View the full answer