Emily began trading as Heathcliff Fashion on 1^st January 2019 with a capital of RM30,000, with which she opened a bank account of RM25,000 and held cash totalling RM5,000. Her trade is selling designer clothing to companies that make films for TV and cinema release. During January 2019 the following transactions took place:

2^nd Paid RM10,000 by cheque to buy furniture.

3^rd Purchased for RM7,000 a selection of high quality clothing from Cathy Clothes to be sold on to customers, paying by cheque

4^th Sold some of the clothing that she had bought for RM3,800 for cash.

5^th Bought another RM2,100 of clothes on credit from Lockwood Fashions.

6^th Banked RM4,000 of the business’s cash

7^th Sold clothes on credit to Earnshaw Costumes for RM3,000.

8^th Earnshaw Costumes paid RM1,800 of the amount owed to Emily, paying by cheque.

9^th Returned RM400 of damaged clothes to Lockwood Fashions.

10^th Earnshaw Costumes ceased trading and Emily was told that none of the remaining amount outstanding would ever be received.

11^th Sold clothes on credit to Heights Productions for RM6,000

12^th Emily paid her assistant, Nelly Dean, RM700 cash as wages for the first two weeks of January

13^th Heathcliff Fashion took out a bank loan of RM6,000 to extend the shop. The money was paid into the business bank account but work on the extension had not started by the end of January.

Note: Closing stock of clothing inventory as on 31 January is RM900.

Required:

Record the above transactions in General Journal Form. Explanation is not required.

Record the above transactions in “T” ledger accounts (8 marks)

Balance off the ledger accounts and extract a trial balance as on 31/1/2019. (4 marks)

Prepare Statement of Profit and Loss for the month of January 2019. (4 marks)

Answer rating: 100% (QA)

a Journal Entrires Date Description Debit Credit Jan19 1 Bank 25000 Cash 5000 Capital 30000 To recor... View the full answer