Answer to Question #232851 in Accounting for Sammy

Question

Jan 1. Issued common stock for K80,000 cash.Jan 2. Purchased equipment costing K82,000 financed by a long term loan from Bizzbucks for the full amount.Feb 7. Provided delivery service to customers, K72,000 in accounts receivable and K16,000 in cash.Feb 18. Incurred repair costs of K3,000 on account from Mbewe Bikes.Mar 12. Collected K65,000 cash from customers on account.Mar 20. Borrowed K90,000 by signing another long-term loan from Bizzbucks.Mar 25. Paid K74,400 cash for bike rentals during the quarter. Mar 25. Paid employees K38,000 cash for work done during the quarter.Mar 26. Paid (with cash) K49,000 fuel for delivery equipment used during the quarter.Mar 28. Paid K2,000 cash on accounts payable.Mar 30. Ordered, but haven’t yet received, K700 in supplies.Required:Open the appropriate ledger accounts and post the accompanying transactions.[22 Marks]Close off the accounts and prepare the Trial Balance as at 31 March.

Answer 1

Solution:

The journal entries are as follows:

The T-Accounts and Trial balance is as below: