Bernice decided to start business of fashion garments under the name of Designer Wear Co. from...

  

Transcribed Image Text:

Bernice decided to start business of fashion garments under the name of Designer Wear Co. from April 01, 2023. She inherited $1,000,000. She invested $300,000 out of her inheritance and borrowed $300,000 from Bank of Montreal. She purchased a commercial space of 500 sq. feet for $500,000. The space so purchased was suitably renovated to make it ready as showroom. She purchased furniture and fixtures for $75,000. Total amount of bank loan is to be repaid in 20 quarterly instalments beginning June 30, 2023. Annual rate of interest is 12% p.a. Repayment Schedule of Bank Loan in the first year is as follows: Due Date June 30, 2023 Principal (5) Interest (5) Instalment (5) 15,000 9,000 $550 8.100 September 30, 202315,000 December 31, 2023 15,000 March 31, 2004 15,000 She started business on April 01, 2022 getting it registered under Goods and Services Tax (GST). In view of further capital requirement, she further invested $200,000 in her business. She deposited Security Deposits of $5,000 for the electricity connection and $2,000 for the telephone connection. Furniture for $10,000 was purchased further. 24,000 23,550 23,000 All payments were made in cash. At the end of the year, her results showed the following: $ Total Sales Total Purchases Electricity Expenses Telephone Charges Freight expenses Travelling expenses Business promotion expenses Maintenance expenses Miscellaneous Expenses Electricity Expenses Payable 2,000,000 1,700,000 40,000 50,000 60,000 45,000 5,000 25,000 15,000 20,000 She withdrew $5,000 by cash each month for her personal expenses. Bank loan installments were paid regularly. Journalize the above transactions in the books of Designer Wear Co., post them into the Ledger and prepare the Trial Balance. Bernice decided to start business of fashion garments under the name of Designer Wear Co. from April 01, 2023. She inherited $1,000,000. She invested $300,000 out of her inheritance and borrowed $300,000 from Bank of Montreal. She purchased a commercial space of 500 sq. feet for $500,000. The space so purchased was suitably renovated to make it ready as showroom. She purchased furniture and fixtures for $75,000. Total amount of bank loan is to be repaid in 20 quarterly instalments beginning June 30, 2023. Annual rate of interest is 12% p.a. Repayment Schedule of Bank Loan in the first year is as follows: Due Date June 30, 2023 Principal (5) Interest (5) Instalment (5) 15,000 9,000 $550 8.100 September 30, 202315,000 December 31, 2023 15,000 March 31, 2004 15,000 She started business on April 01, 2022 getting it registered under Goods and Services Tax (GST). In view of further capital requirement, she further invested $200,000 in her business. She deposited Security Deposits of $5,000 for the electricity connection and $2,000 for the telephone connection. Furniture for $10,000 was purchased further. 24,000 23,550 23,000 All payments were made in cash. At the end of the year, her results showed the following: $ Total Sales Total Purchases Electricity Expenses Telephone Charges Freight expenses Travelling expenses Business promotion expenses Maintenance expenses Miscellaneous Expenses Electricity Expenses Payable 2,000,000 1,700,000 40,000 50,000 60,000 45,000 5,000 25,000 15,000 20,000 She withdrew $5,000 by cash each month for her personal expenses. Bank loan installments were paid regularly. Journalize the above transactions in the books of Designer Wear Co., post them into the Ledger and prepare the Trial Balance.

Answer rating: 100% (QA)

To journalize the transactions for Designer Wear Co and prepare the trial balance well proceed through a series of journal entries that correspond with each transaction mentioned in the case presented ... View the full answer