1. Task 1: learning outcome 1

Problem 1:

Your line manager has provided you with the following information:

A Sole Trader business incorporates as Horizons Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2021 without having specialised accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizes the relevant economic transactions that have been done during the first month in an appropriate and standardized way.

Instructions

In this task you have to use the transactions from table 1 in order to:

1. Journalize the July transactions, by applying the double entry book-keeping system of debits and credits.
2. Record sales and purchases transactions in a general ledger.
3. Analyse transactions using double entry bookkeeping appropriately and effectively. Your analysis should show the effects of transactions on the basic accounting equation
4. Prepare the ledger book.

Table 1: Horizons Programming Company July Transactions

Transaction number	Date July	Transaction
1	1st	The owner invests $150,000 cash in the business.
2	2nd	The business purchases office equipment for $30,000 cash.
3	4th	The business purchases for $3,500 on account from a Supply Company computer paper and other supplies expected to last for several months
4	6th	The business receives $5,000 cash from customers for programming services it has provided.
5	9th	The business provides $10,000 of programming and maintenance services for a customer. It receives cash of $7,000, and it bills the balance of $3,000 on account.
6	10th	The business purchases computer accessories as an inventory in order to resell them. The business purchases 1,000 headsets for $15 each with credit term of 10/15, n/30.
7	11th	The business finds out that 150 pieces of headsets are defective and returns them back to the supplier.
8	22th	The business pays the purchases due balance for the supplier.
9	20th	The business sells 500 units for customers for $20 each, with credit term of 6/10, n/ 20.
10	22nd	The customer returns 50 headsets that dont meet the specifications.
11	27th	The business receives the sales due balance from the customers.
12	28th	The business owner withdraws $2000 cash from the business for his personal use.
13	29th	The business hires a new secretary with basic salary of $750
14	31th	The business receives $6000 for programming services that will provide during the next 3 months.
15	31th	The business pays the following expenses in cash for February: Store rent $950, salaries and wages of employees $2800 and utilities $1250.
16	31th	The business purchase a 6-month insurance policy for $6000