70.2K

Verified Solution

Link Copied!

Your friend B$.$ Buhari has started a new business on $1$ May $2024$ and asked your help to record

the following transaction taken place during the last month.

May $1$: B$.$ Buhari deposited money in a business bank account $$25,000$ May $2$: Negotiated overdraft from bank $$10,000$

May $3$: Bought inventory from A$.$ Fiddle on credit $$16,500$ May $3$: Bought equipment from T$.$ Xerox on credit $$3,000$

May $4$: Paid three month$$s rent in advance on shop premises $$3,000$ May $5$: Sold goods on credit to I. Dunno $$2,000$

May $8$: Cash sales for the week ending $17$ May $$9,750$

May $10$: I. Dunno returned faulty goods, gave full credit $$630$ May $11$: Purchased stock from B$.$ Fawlty for cash $$13,560$ May $15$: Cash sales for the week ending $24$ May $$6,760$ May $17$: Paid A$.$ Fiddle $$16,500$

May $18$: Bought vehicle on $14$ days credit $$27,600$ May $19$: Paid T$.$ Xerox $$3,000$

May $19$: Paid telephone account $$175$ for the month May $19$: Paid electricity account $$150$ month

May $20$: Bought insurance and prepaid three months $$1,800$ May $24$: Dunno paid his account $$2,000$

May $26$: Sold goods on account to M$.$ Mouse $$13,750$

May $27$: The bank charged $$200$ as monthly fee for the overdraft. May $31$: Cash sales, week ending May $31$ $$5,330$

May $31$ The closing inventory was $$5,420$

Required:

a$)$ Prepare journal entries.

b$)$ Post to the ledger accounts $($T$-$account form$).$

c$)$ Prepare trial balance.

d$)$ Based on the trail balance, form a worksheet to prepare the comprehensive income and the balance sheet.

e$)$ Prepare the comprehensive income and the balance sheet.

f$)$ Comments on the financial performance and the position of the business.

Answer & Explanation Solved by verified expert

See Answer