QUESTION
Ms. Anna started her business (“Anna Car Repairing Shop”) on
January 1, 2018. During the first month of its operations, the
business engaged in the following transactions:
Date
Transactions
Jan 1
Jan 2
Anna invested cash $100,000 as initial capital to start the
business.
An amount of $36,000 was paid as advance rent for three
months.
Jan 3
Paid $60,000 cash on the purchase of equipment costing $80,000. The
remaining amount was recognized as note payable.
Jan 4
Purchased office supplies costing $17,600 on account.
Jan 13
Provided services to its customers and received $28,500 in
cash.
Jan 13
Paid the accounts payable on the office supplies purchased on
January 4.
Jan 14
Paid wages to its employees for the month of January, aggregating
$19,100.
Jan 18
Provided $54,100 worth of services to its customers. They paid
$32,900 and promised to pay the remaining amount in the next
month.
Jan 23
Received $15,300 from customers for the services provided on
January 18.
Jan 25
Received $4,000 as an advance payment from customers.
Jan 26
Purchased office supplies costing $5,200 on account.
Jan 28
Paid water bill of $19,000 for January
Jan 31
Paid $5,000 advertising expense.
Jan 31
Received electricity bill of $2,470 for January.
Jan 31
Received telephone bill of $1,494 for January.
Jan 31
Miscellaneous expenses paid during the month totaled $3,470.
Instructions:
a) Journalize the transactions with explanations (Ignore the
reference numbers). (16)
b) Post the transactions in the ledger account. (16)
c) Prepare a Trial Balance for Jan 31, 2018. (10)
d) Prepare an Income Statement and a classified Balance for Jan 31,
2018 based on the information available in the trial balance.
(10)
Public Answer
