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:
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.
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was recognized as note payable.
Purchased office supplies costing $17,600 on account.
Provided services to its customers and received $28,500 in cash.
Paid the accounts payable on the office supplies purchased on January 4.
Paid wages to its employees for the month of January, aggregating $19,100.
Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the remaining amount in the next month.
Received $15,300 from customers for the services provided on January 18.
Received $4,000 as an advance payment from customers.
Purchased office supplies costing $5,200 on account.
Paid water bill of $19,000 for January
Paid $5,000 advertising expense.
Received electricity bill of $2,470 for January.
Received telephone bill of $1,494 for January.
Miscellaneous expenses paid during the month totaled $3,470.
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)