On 2 July Fred set up in business as an estate agent. The following transactions occurred during the month of July: July 2nd Fred paid £10,000 into a bank account for the business. 3rd He rented an office for the business - the rent of £750 for July was paid. 4th Office furniture costing £2,400 was purchased on credit. A down payment of £600 was made immediately with the balance to be paid in three equal monthly installments. 5th IT equipment costing £525 was purchased for the office. 6th Paid £155 for stationery. 13th Fred received a cheque for £600 as commission in respect of the sale of a client’s home. 19th The home of another client was sold. The commission of £875 on this sale will not be received until August. 25th Paid £410 for advertising. 26th Further £97 paid for stationery. 28th Fred transferred £604 from his business bank account to his private bank account, £84 of which was to reimburse motor expenses incurred for business use. The remaining £520 was withdrawn for private purposes.

Required: Show the nominal ledger entries (using T-accounts) for the above transactions. Close off each T-account and prepare: 

• a Trial Balance 

• Statement of Profit or Loss 

• Statement of Financial Position.

Answer rating: 100% (QA)

JOURNAL ENTRY 2 JULY BANK ACCOUNTDR 10000 TO CAPITAL ACCOUNT FRED 10000 BEING CAPITAL INTRODUCED ... View the full answer