In Top-shop plc, a trading company, the following transactions have occurred during January:

1st Make $500 short-term loan from the bank (@6% a year). Interest normally pays at the end of each month.

3rd Purchase goods @$230 on credit from supplier N, terms FOB shipping point (transportation cost cash paid @$40)

4th Sale goods @$175 on credit (originally @$80)

7th Due to a deterioration of goods’ quality, supplier N reduces 2% for the value of purchased goods in transaction 2.

9th Purchase goods @$420 on credit from supplier N, terms FOB destination (transportation cost cash paid @$60)

14th Sale goods @$250 on credit (originally @$195)

20th Make $100 payment from bank account to supplier N

24th Sign insurance contract (3-month length @$120/per month) for inventories. Cash pay in advance.

30th Sale goods @$500 (originally @$390), 50% of this amount received by cash.

Additional information:

Beginning balances (1st Jan):

Cash $1,500

Bank account $1,100

Trade receivable $150

Inventories $1,200

Machine $2,400 (depreciation expense @$100 per month)

Accumulated depreciation $400

Requirement: 

1. Journalize the transactions

2. Prepare Trial Balance for the month

3. Prepare Profit Loss statement for the month

4. Prepare Balance Sheet for the month

Answer rating: 100% (QA)

1 Journalizing the transactions Jan 1 Cash 500 Notes Payable 500 For the shortterm loan from the ban... View the full answer