Question

Requirement 1: ACCOUNTING AND THE BUSINESS ENVIRONMENT. Have you ever dreamed of running of your own business? If so, where would you begin? How much money would you need? What type of business you plan to form? Or maybe, you would like to be an investor. There are a lot of decisions to make. And you don't have to be an accountant to make a good decision, but understanding accounting can assist you to answer these questions. Required: 1. You are required to form a small merchandising business 2. Explain the name and nature of the business, location, mission and objectives of the company. Assume the business started on 1 January 2019. (5m) 3. List down the transactions incurred during the first month of operation. The transactions should cover relationship between the following accounting elements. i. Investment in the business (1 transaction) ii. Purchase of inventories (2 transactions) Sell of inventories (2 transactions) iv. Purchase return OR sales return (choose ONE (1) only) (1 transaction) Purchase discount OR sales discount (choose ONE (1) only) (1 transaction) V.

Answer 1

Bimal Dato: Page No. 18 2: Business Name : TECH MART Inc. Address: 212 ST ,PO 41432, BOSTON, MA 3. TECHMART is a merchandsing business corporation which sells high end gaming to programing Laptops. Objective: To provide best laptops with latest features at a lower than the other sellers, price Business started on Jan 1, 2019 Transactions i Jan. Invested $500000 in exchange of common stock Jan. Purchased laptops from XWD 2td. an enodit & 200000 (50 Laptops) Janity Paid Rent of showroom $2500 Jan 12 sold 10 Laptops to a school in the city for $55000 in cesh Jan 15 Returned 4 laptops to awD Ltd as they defected, 2 Laptops returned by the school as they are defected, & refunded the cash. were Jan. 25

Bimal Date Page No. on account startup company named Jan. 26 Purchase adolitional 20 Laptops from ALPHA dealers, for $68000 Jan. 28 Sold 15 laptops to a ZIGMO Inc. for $74000 on cash. Jan. 31 Inventory in showroom $ 200CY1680.00. @ Journal Entries Cash Sooooo Common stock Reg. 2 200 Jan 11 Soooo of Jan 3 Rent Expense 2500 Cash 2500 Jany Purchase acestui 200000 Accounts Payable 200000 Jan. 12 Cash 55000 Sales Revenue 55000 Jan 15 Accounts Payable 16000 Bookchase Return / 16000 Jan. 25 Sales Retwen Cash 11000 11000

SUR Dato: Pago No Jan 26 r8ooo Purchase Bardaus 68000 Ancounts Payable Cash 74000 Sales Revenue Jan. 28 lood Common Stork 500000$ Cash 500000 2500 55000|4000 74000 SOODY Rent Expense 2500 625 500 Purchase entory 200000 680 26800 2500 Sales Revenue Ssovo 174000 11290001 Accounts Payable 16000 200ood 68000 252000 Purchare Return 16000 Sales Return 11 σOO (6600 llooo

Pago No c.) Trial Balance Credit Cash Common stock Rest Expense Purchase Accounts Payable Sales Revenue Sales Return Penchen Return Debit 615500 50000 2500 obron 268000 688 252000 129000 11ooo 16000 896SVO 696500 d. Cost of Croods Sold = Purchase - Purchase Return - A closing inventory 268000 -16 ovo -168000 84000 - Income Statement Revenue Sales 129000 sales Return llooo Expense Cost of Goods Sold 8 your 2500 1180oo 86560 Rent Expense Net Income 31,500

e.) As per analysis of income statement found that business needs to increase it sales, as its a newly started business it will be better to spend some money on advertisement to grab more customers. That'll ultimately result in higher sales and increased income.

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