QUESTION 2 Charles Johnny forms a new business which is College Merchandise Sdn Bhd. Th business operates a small store in a mall area and specialized in caps, t-shirt an other merchandise with logos printed on them. Charles has limited knowledg about recording and reporting financial data. Thus, you have been hired to recor the transaction occurring in the first month of operations: Jan Deposited RM 25,000 in the business's bank account to commence operation 1 Borrowed RM 20,000 from Public Bank to provide additional cash funding to the business. 3 4 Paid RM 3,500 on cash basis for the current month's rent. 5 10 Paid RM 2,000 cash, for a one year fire insurance policy. Purchase furniture for the store for RM 10,000 cash. Purchased inventory for RM 5,000 cash 12 20 Place advertisement in local newspaper for a total of RM 500 cash Sold 500 units of merchandises for RM 6,500 cash 21 25 Purchase inventory from supplier for RM 7,800 on credit. Additional information: This small company apply perpetual inventory system which recor inventory by forming inventory account (no purchases account is form). The cost of per unit merchandise is RM 8 . Based on the transactions, answer the following question: a) Indicate the effect of each transaction and the balances after eac transaction using the tabular heading: asset equal liability plus owner's equity cash furniture inventory loan account payable capital revenue expenses b) Prepare an income statement and balance sheet for this company for the mont ended Jan 31, 2018. 222