John started a business on 1 August 2022. Her first month’s transactions are as follows: 1 Aug John started the business with £15,000 in cash. She paid £14,400 of this amount into the business bank account. The first month’s rent for her business premises was paid in cash, amounting to £400. 3 Aug John bought equipment costing £4,200, paying by cheque. Inventory costing £9680 was bought on credit from Avas Plc. 7 Aug Inventory was sold for £4050. The customer paid by bank transfer. 8 Aug Inventory costing £310 wasreturned to Avas Plc. 14 Aug Inventory was sold on credit to B. Ismail for £4,500 and C. Thompson for £370. 17 Aug A sum of £42 was paid in cash for electricity. 20 Aug B. Ismail returned inventory originally sold to him for £250. 23 Aug The amount owing to Avas Plc was paid by cheque. 25 Aug Inventory costing £7,100 was bought on credit from K. Martins. 28 Aug The amount owed by B. Ismail was received by cheque. 30 Aug £1,540 was paid by cheque for insurance. A salary of £380 was paid by bank transfer to a temporary employee who resumed on the 12 August.

Required: Record these transactions in John’s ledger accounts, balance these off and draw up a trial balance as at 30 Aug 2022.

Answer rating: 100% (QA)

To record the transactions in Johns ledger accounts we need to categorize each transaction and post them to the appropriate accounts Heres a breakdown of each transaction and its corresponding ledger ... View the full answer