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Let’s take a set of transactions and prepare all the requisite information asked.
Following are the transactions for the period April 20×1 to March 20×2 in the books of Michael Traders
|1-Apr||Michael started a business with cash 600,000, cash at Bank of America 700,000, furniture 200,000.|
|1-Apr||Purchased Plant & Machinery worth 250,000 by cheque.|
|25-Apr||Purchased goods from ABC Ltd worth 800,000 @10% trade discount.|
|5-May||Cash Sales 1,000,000 @5% trade discount to XYZ Traders|
|15-May||Deposited cash with Bank of America 500,000.|
|5-Jun||Paid ABC Ltd 300,000 in cash.|
|10-Jun||Received commission 75,000 by cheque.|
|25-Jun||Cash Purchases 250,000.|
|5-Jul||Sold goods to XYZ Traders 475,000.|
|15-Jul||Received 275,000 by cheque from XYZ Traders.|
|5-Aug||Loan taken from Bank of America 200,000|
|25-Aug||Purchased goods from ABC Ltd 50,000.|
|27-Aug||Withdrew cash from bank 10,000.|
|5-Sep||Received commission 55,000 in cash.|
|10-Sep||Paid ABC Ltd 70,000 by cheque.|
|20-Sep||Received 90,000 in cash from XYZ Traders.|
|1-Oct||Bank loan repaid 50,000.|
|25-Oct||Cash Purchases 25,000.|
|5-Nov||Sold goods to XYZ Traders 47,000.|
|15-Nov||Withdrew cash from bank 15,000.|
|5-Dec||Received interest from bank 5,000.|
|25-Dec||Purchased goods from ABC Ltd 75,000.|
|5-Jan||Cash Sales 100,000.|
|15-Jan||Deposited cash with Bank of America 35,000.|
|25-Feb||Cash Purchases 450,000.|
|28-Feb||Office was taken on rent in the month of Feb. Office rent paid in cash 50,000.|
|28-Feb||Employees were hired in the month of Feb. Paid salary by cheque 30,000 & cash 30,000 for the month of Feb 20×2.|
|5-Mar||Sold goods to XYZ Traders 675,000.|
|31-Mar||Paid office rent by cheque 50,000.|
|31-Mar||Paid salary in cash 30,000 for the month of March 20×2.|
You are required to;
(i) Journalize the above transactions and post them in Ledgers and prepare a Trial Balance.
(ii) Prepare Trading A/c, Profit & Loss A/c and Balance Sheet taking into consideration:
1. Closing Stock as of 31st March 20×2 is 200,000.
2. Salary outstanding for the month of March 20×2 is 30,000.
3. Depreciation@10% to be charged on Furniture & Fixtures and @15% on Plant & Machinery.
1. Journal Entries
3. Trial Balance
4. Trading A/c & Profit and Loss A/c
5. Balance Sheet
An Excel sheet of the entire transactions along with the requisite information asked has been attached for your reference.