Assignment Question: Mrs. Alicia started a Kids Apparel business as a sole proprietor under the brand name of “Kidz Party”. Consider the following transactions during the 1stmonth of her business.

1. On 1stMarch, she invested a capital of USD 7500 in the business.
2. On 2ndMarch, she withdraws $100 of cash from the business for her personal use.
3. On 3rdMarch, she purchased an office/building for USD 2500 cash for business use.
4. On 5thMarch, she purchased furniture for USD 750 cash for business use.
5. On 6thMarch, she purchased inventory of ready suits from her tailor for USD1500 on

cash.

6. On 9thMarch, she sold kids clothes to the customer for USD 500 cash, the cost of those

suits was USD 350.

7. On 12thMarch, she further purchased inventory of ready suits for USD 1000 on credit.
8. On 15thMarch, she sold kids suits to the customer for USD400 on credit, the cost of those

suits was USD275.

9. On 18thMarch, she paid USD 500 cash to her payables.
10. On 20thMarch, she collected USD400 cash from the receivables.
11. On 25thMarch, in an incident, she faced loss due to the theft of suits costing USD 50.
12. On 28thMarch, she paid USD 75 cash for utility bills.
13. On 31stMarch, she borrowed money from bank of amount USD 2500 for business

purpose.

Possible Account Titles

• Cash
• Capital
• Building
• Furniture
• Inventory
• Accounts payable
• Accounts receivable
• Notes payable

Notes:

• The above titles are just for your understanding. You can use alternate / additional titles

as well.

• For theft, report an expense with an entry such as "loss due to theft." This expense will

also have an impact on net income and reduces owner's equity Additionally, loss will

influence inventory from assets and capital from equity side.

Required:

1. Show how each of the above transactions impacts the accounting equation of Ms. Alicia’s business, “Kidz Party” using journal ledger entries. (Follow the pattern that we discussed during the lecture)
2. Prepare the balance sheet and income statement for Ms. Alicia’s business for the month of March.
3. Expand the basic accounting equation for a sole proprietor business to show the various equity components (if applicable).

Answer rating: 100% (QA)

Kidz Party General Journal Entries For the Month Ended March 3120XX No Date Account Title and Descri... View the full answer