Question

Assume that you are the owner of a wholesale store and that you operate as a sole trader. On May 1, 2017 you had the following items in your business:
Stock, $14,500,000; Motor vehicles, $15,000,000; Creditors/Accounts payable- J. Downey $1,500,000, P. Wright $2,000,000; Cash in hand, $300,000; Pre-paid insurance, $80,000; Bank loan, $4,000,000; Furniture & fittings, $3,600,000; Accrued rent, $100,000; Cash at Bank, $12,000,000; Debtors/Accounts receivable-A. Howard $3,000,000, S. Simpson $2,800,000; K. Kirk $350,000.
During May 2017 the following business were transacted:

May 1- Bought goods on credit from B. Burke $4,500,000.
3- Paid rent with cheque $150,000.
5- Sold goods on credit to A. Harvey, $5,600,000.
7- Cash sales, $400,000.
10- Paid electricity bill $130,000 cash.
12- Paid J. Downey $1,000,000 by cheque.
15- Sold goods on credit to S.Simpson, $7,000,000.
15- Paid P. Wright $1,500,000 by cheque.
18- S.Simpson paid $3,500,000 by cheque.
19- Bought goods on credit from F. Smith, $2,400,000.
22- Sold goods for cash to T. Royal, $1,800,000.
24- Returned damaged goods valued at $300,000 to B.Burke.   
25- Paid wages by cheque, $3,000,000.
27- Paid insurance $70,000 cash.
28- Paid $50,000 for transportation charge for goods bought from F. Daley.
28- Received a cheque for $2,200,000 from A. Howard.
29- Sold goods on credit to V. James, $6,200,000.
29- Miscellaneous expenses paid with cheque, $1,250,000.
29- Bought goods for cash from C. Croft for $350,000.
30- Banked $1,000,000.
30- A. Harvey returned incorrect goods delivered to him valued at $200,000.
30- The balance on K. Kirk’s account was written off as irrecoverable.
30- Received $300,000 cash as commission for selling goods for D. Riley.
  
Notes:
(i) On May 30, 2017 stock on hand was valued at $11,000,000.
(ii) Office furniture and motor vehicles are to be depreciated at 10% and 20% per annum respectively using the straight line method.
(iii) $100,000 in rent was owed on May 30, 2019.
(iv) On mayl 30, 2017 wages paid in advance amounted to $200,000.
(v) There was no accumulated depreciation on fixed assets as at May 1, 2017.
Required:
Use the above information to prepare the following for the month of may 2017:
(a) The opening position of your business on May 1, 2017. (b) The Sales Journal
(c) The Purchases Journal.
(e) The Return Outwards Journal.
(f) The General/Nominal Journal.
(g) The Sales Ledger.
(h) The Purchases Ledger.
(i) The General/Nominal Ledger.
(j) The Cash Book/Account
(k) The Sales Ledger Control Account.
(l) The Purchases Ledger Control Account.
(m) A Trial Balance as at May 30, 2019.
(n) A Trading and Profit and Loss Account for the month ending May 30, 2017
(o) A Balance Sheet as at May 30, 2017.

Answer 1

Dave bil 10 t ch chase Jouana Page Account caediad B Busk Amount fSmith 4 500 050 $2400, 66D $ 350,000 Cash May so Total 1250,000 &al Jounal lnuaiu No Accouat Arbiled Bats PR Amount C) A Hauty 45600,400 y Hay 7 15 Cauh S Simpson y Cauh 6200,0n0 V.Tanu y 29 21000,0O Hay5 Total Reuan Ouhaaud Taunal Nole No (e) Aut 4) $ 360,ro at Aetal 6 Buke $3000 May50 Total