Emma began business as a retailer on 1 January 20X1. During January 20X1 she carried out the…

Emma began business as a retailer on 1 January 20X1. During January 20X1 she carried out the following transactions:

1 January 20X1

(a) Paid £35,000 into the business bank account, of which £20,000 was from personal savings and £15,000 was a loan from the bank at 12 per cent per annum interest.

(b) Rented a shop for a monthly rent of £3,500 payable in advance.

(c) Bought fixtures and fittings for £7,500, paid for from the business bank account.

(d) Bought 10,000 units at a price of £2.00 each.

14 January 20X1

(e) Sold 4,000 units at £4.50 each for cash and paid the proceeds into the business bank account.

(f) Paid the following expenses from the business bank account:

Wages

£1,100

Lighting and heating

£900

Other expenses

£1,200

31 January 20X1

(g) Sold 5,000 units for £5.00 each on credit to Samuel.

(h) Bought a further 3,000 units on credit for £2.50 each from Basil.

(i) Paid the following expenses from the business bank account:

Interest on loan

£150

Wages

£1,300

Telephone

£200

Other expenses

£1,700

Record the above transactions in the T accounts. Prepare a trial balance as at 31 January 20X1.

 

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