Answer to Question #306719 in Accounting for Katie

Question

You have the following information for MrVuong’s store for fiscal year 20X0:

February:

1st Hire a sale assistant @700 per month, salary is paid at the end of each month. Also, purchase an insurance contract for the vending machine (@50 per month, the length of the contract is 12 months and cash pay full in advance).

2nd Invest more 3,000 cash into the business.

5th Purchase goods at cost of 5.000 on credit.

12th Make a payment of 7.000 cash to supplier of goods.

18th Sell goods (which originally cost 5.000) @3.000 in cash (due to an impairment of the quality of sold goods).

20th Borrow 1.000 cash from bank.

25th Sell goods (which originally cost 2.000) @3.000 and 50% of this is received in cash (the rest is on credit).

28thPay salary (@50 cash) for sale assistant.

Requirement: Record the transactions in February and prepare Trial Balance for the month.

Answer 1

1.Debit operating expenses Credit personnel expenses - 700

Debit cash desk Credit settlements with other debtors and creditors -600

2. Debit cash desk Credit settlements with founders - 3000

5.Debit goods Credit credit settlements - 5000

12.Debit settlements with suppliers Credit cash desk- 7000

18. Debit settlements with buyers Credit sales - 3000

Debit cash desk Credit settlements with buyers - 3000

20.Debit cash desk Credit credit settlements - 1000 

25.Debit settlements with buyers Credit sales - 3000

Debit cash desk Credit settlements with buyers - 3000

28.Debit settlements with personnel Credit cash desk - 50