Create a name for the owner of the company and give the business a name that reflects the operations of the organization.   Record the transactions stated above in the general journal.   Post the transactions to the general ledger and balance off each account   Extract a trial balance on August 31st.   Prepare an Income Statement for the month ended August 31st, the owner’s equity statement and a Balance Sheet as at that date

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter3: The Double-entry Framework
Section: Chapter Questions
Problem 5SEA: TRANSACTION ANALYSIS Linda Kipp started a business on May 1, 20--. Analyze the following...
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Assume that a relatively new company you and you group members are involved with has presented you with the following transactions for 2021 from the books of the business.  This company operates one bank account to reflect all cash and cheque transactions. You are now required to read these transactions carefully then prepare the relevant documents and books as outlined in the requirements below.

 

 

 

1 Aug                    Started business with $150, 000 in the bank

 

 

 

3 Aug                    Bought supplies on credit from Right Way Manufacturers

 

                                24 Boxes Air Filter                                                                                            $720.00 per box

 

                                96 Bottles fuel injector cleaner                                                   $200.00 per bottle

 

                                48 Boxes Spark Plug                                                                        $300.00 per box

 

                                36 Boxes Brake Shoe                                                                      $580.00 per box

 

                                24 Boxes Disc Pads                                                                                          $400.oo per box

 

 

 

5 Aug                     Provided services for cash less 10% discount

 

                                12 small motorbike engines                                                        $350.00 per engine

 

                                6 large motorbike engines (full service)                                  $950.00 per engine

 

                                8 medium size motorbike engines (full service)                   $800.00 per engine

 

 

 

7 Aug                    Paid Rent by cheque                                                                       $5,000.00

 

 

 

10 Aug  Paid Wages by cheque                                                                   $8,000.00

 

 

 

10 Aug Bought Fixtures from CT Limited                                                                $3,500.00

 

                                paying by cash

 

 

 

11 Aug  Provided services on credit to Auto Care.

 

                                24 small motorbike engines                                                        $350.00 per engine

 

                                8 large motor bike engines (partial service)                          $650.00 per engine

 

                                12 medium size motorbike engine (partial service)            $550.00 per engine

 

 

 

12 Aug  Bought Fixtures on credit from CT Ltd                                     $8,000.00

 

 

 

13 Aug Received a loan from NBC cash                                                  $25,000.00

 

                              

 

14 Aug  Provided services on credit to P&S Auto

 

                                18 Large motorbike engines (full service)                               $950.00 per engine

 

                                12 medium size motor bike engines                                         $650.00 per engine

 

                                24 medium size motorbike engines                                          $550.00 per engine

 

                                20 small motorbike engines                                                        $350.00 per engine

 

 

 

21 Aug  Paid CT Ltd by cheque                                                                    $8,000.00

 

 

 

22 Aug  Paid wages cash                                                                                                $8,000.00

 

 

 

23 Aug  Paid Right Way Manufacturer the amount owing to them

 

                                by cheque, they allowed us a 15% discount

 

 

 

27 Aug  P&S Auto paid the amount owing by them in

 

                                Cash less 10 % discount

 

 

 

27 Aug  Electricity paid by cash                                                                   $1,500.00

 

 

To avoid duplication of account names and the use of improper account names, the company has provided the following list of accounts used to record its transactions as extracted from its chart of accounts:

 

Capital

Cash

Supplies

J Manufacturers

Service Revenue

Discount Allowed

Rent Expense

Wages Expense

Supplies Expense

Fixtures

Auto Care

Loan NBC

Discount Received

Electricity Expense

Drawings

 

 

Requirements:

 

Create a name for the owner of the company and give the business a name that reflects the operations of the organization.

 

Record the transactions stated above in the general journal.

 

Post the transactions to the general ledger and balance off each account

 

Extract a trial balance on August 31st.

 

Prepare an Income Statement for the month ended August 31st, the owner’s equity statement and a Balance Sheet as at that date

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