Question

Q6. Dollarama Inc. completed the following transactions during November 2019, its first month of operations:

Nov. 1 Received $25,000, and issued common shares.  

Nov. 5 Purchased $800 of office supplies on account.  

Nov. 6 Paid $20,000 cash for land to use as a building site.

Nov. 10 Performed service for customers, and received cash of $5,000.  

Nov. 15 Paid $100 on accounts payable.

Nov. 18 Performed service for Waterloo School Board on account totaling $1,500.  

Nov. 25 Collected $1,000 from Waterloo School Board on account.

Nov. 30 Paid the following expenses: salary, $1,000; rent, $500.  

Requirements:

1. Record the transactions in the journal of Dollarama Inc.  Key transactions by date, and include an explanation for each entry, as illustrated in the chapter.

2. After journalizing the transactions, post the entries to the ledger using T-accounts. Key transactions by date. Date the ending balance of each account November 30, 2019.

3. Prepare the trial balance of Dollarama Inc., as at November 30, 2019.  

4. How much are total assets, total liabilities, and total shareholders’ equity on November 30, 2019.

Answer 1

SI. Credit Journal Entries Date Account title Nov 1 Cash Common Stock (To record issue of common stock for cash Debit $ 25,000 1 $ 25,000 2 $ 800 Nov 5 Office Supplies Accounts Payable (To record purchase of office supplies onaccount) $ 800 3 $ 20,000 Nov 6 Land Cash (To record purchase of land with cash) $ 20,000 4 $ 5,000 Nov 10 Cash Service Revenue (To record cash receipt from service revenue) $ 5,000 5 $ 100 Nov 15 Accounts Payable Cash (To record payment creditors on account) $ 100 6 $ 1,500 Nov 18 Accounts Receivable Service Revenue (To record service performed on account) $ 1,500 7 $ 1,000 Nov 25 Cash Accounts Receivable (To record received cash in payment of account) $ 1,000 8 $ 1,000 $ 500 Nov 30 Salaries Expense Rent Expense Cash (To record expenses for cash) $ 1,500

2 Ledger Cash Accounts Receivable Beg.Bal Nov 18 1,500 1.000 Nov 25 Beg.Bal Nov 1 Nov 10 Nov 25 25,000 5,000 1,000 20,000 100 1,500 Nov 6 Nov 15 Nov 30 Nov 30 9,400 Nov 30 500 3. Trial Balance Dollarama Inc. Trial Balance November 31,2019 Debit Credit Cash $ 9,400 Accounts Receivable $ 500 Office Supplies $ 800 Land $ 20,000 Accounts Payable $ 700 Common Stock $ 25,000 Service Revenue $ 6,500 Salaries Expense $ 1,000 $ Rent Expense $ 500 Totals $32,200 $32,200 $ Office Supplies Land Beg.Bal Nov 5 Beg.Bal Nov 6 800 20,000 Nov 30 800 Nov 30 20,000 Accounts Payable Common Stock Beg.Bal Nov 5 Beg.Bal Nov 1 Nov 15 100 800 25,000 700 Nov 30 25,000 Nov 30 Service Revenue Salaries Expense Beg.Bal Nov 10 Nov 18 Beg.Bal Nov 30 5,000 1,000 1,500 6,500 Nov 30 Nov 30 1,000 Rent Expense Beg.Bal Nov 30 500 Nov 30 500

Dollarama Inc. Income Statement For the Month Ended November 31,2019 Revenues: Service Revenue $ 6,500 Expenses: Salaries Expense $ 1,000 Rent Expense $ 500 Total Expenses $ 1,500 Net Income $5,000 Dollarama Inc. Statement of Retained Earnings For the Month Ended November 31, 2019 Beginning Retained Earnings $ Add: Net Income $ 5,000 $5,000 Less: Dividends $ . Ending Retained Earnings $5,000 $ 9,400 $ 500 $ 800 $ 20,000 Dollarama Inc. Balance sheet November 31, 2019 Assets: Current Assets Cash Accounts Receivable Office Supplies Land Total Assets Liabilities: Accounts Payable Total Liabilities Shareholders' Equity: Common Stock Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $ 30,700 $ 700 $ 700 $ 25,000 $ 5,000 $ 30,000 $ 30,700 $ $ *Total Assets = $30,700; *Total Liabilities=$7000; *Total Shareholders Equity=$30,000

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