George started his business in 2019 by depositing £9,000 in a bank account and contributing his car - estimated to be £4,250 – to the business, he also had some inventory left which is estimated to be £800.

During the financial year 2020, the following events took place.

1. He transferred money from his bank account to his cash £4,000.

2. He bought goods on credit for £3,500 from Lilian.

3. He returned to Lilian £100 of the goods.

4. He sold £2,800 in cash to Marco.

5. He bought goods from Mary for £4,000 and paid by cheque.

6. He paid £50 in cash to get his goods delivered from Mary.

7. He sold goods to Harvey for £3,500 on credit.

8. He paid insurance by cheque £250

9. He paid electricity for £125 in cash.

10. Harvey returned £200 of the goods bought and paid £2,000 in cash

11. He received a £350 cheque for renting some facilities of his business.

12. He bought equipment for the business in cash £1,750

Closing inventory is estimated £3,800 as per 31/12/2020

I. Post the previous transactions to the related ledgers.

II. Prepare the trial balance.

III. Prepare the financial statements of the business (Income Statement & Statement of Financial Position).

IV. What are the benefits of a double-entry system?

Answer rating: 100% (QA)

Solution LEDGERS I CASH AC Cr Particeelars To Bank dc To Sales c CE Date ... View the full answer