S. John opened a textile business on 1 January 2021. His transactions for the month of January were as follows:-

January 2 opened bank account and deposited cash of $65,000 and retained
$10,000 in cash
3 paid $2,000 for rent in cash
4 purchased clothes for $50,000 from Mulwa and Co. on credit
5 sold clothes for $60,000 in cash
6 purchased new office furniture for $40,000 by cheque
9 banked cash $20,000
10 purchased clothes worth $30, 000 from Matthew and Mati Drapers
and paid half of the amount by cheque
11 Sold clothes worth $25,000 on credit to Bagaya Exporters
12 Hired transport for $2,000 and paid in cash
13 Bagaya Exporters returned some clothes costing $3,000 and were
given credit note for the same
16 received cheque for $7,000 from Bagaya Exporters
18 Purchased clothes for $9,000 on credit from Samuel Omayo
21 sold clothes worth $5,000 on credit to B. C. Boutique
23 paid Mulwa and Co. $15,000 by cheque on account
24 withdrew $6,000 from bank for personal use
25 bought clothes for $8,300 and paid by cheque
28 sold clothes for $5,400 to Sunshine Boutique and received a
cheque for $1,200
30 paid Matthew and Mati Drapers by cheque the full amount due to them
less 5% discount
31 paid salaries $4,000 in cash and a water bill $700 by cheque
Required:
a) Three-column cash book for the month of January 2021 (4 marks)
b) Make relevant entries in the ledger and balance all accounts (13 marks)
c) Extract a trial balance as at 31 January 2021 (3 marks)

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a Threecolumn cash book for the month of January 2021 Date Particulars Debit Credit 2 Ban... View the full answer