Question

In: Accounting

Question 2 Abang Sado set up a business selling fitness equipment. He put RM7,000 of his...

Question 2
Abang Sado set up a business selling fitness equipment. He put RM7,000 of his own money into a business bank account and in his first year of trading, the following transactions occurred.
1) Paid rent of shop for the period RM3,500
2) Purchased equipment (inventories) on credit RM5,000
3) Loan from bank RM1,000
4) Purchase of shop fittings (for cash) RM2,000
5) Sales of equipment: cash RM10,000
6) Sales of equipment: on credit RM2,500
7) Payment for trade payables (discount received RM50) RM4,950
8) Receipt from trade receivables (discout alowed RM20) RM2,480
9) Interest on loan (paid) RM100
10) Other expenses (all paid in cash) RM1,900
11) Drawings RM1,500
Prepare the ledger accounts for Abang Sado by opening up the following accounts and completing them:
• Cash at bank
• Capital
• Loan
• Purchases
• Trade payables
• Rent
• Shop fittings
• Sales
• Trade receivables
• Discount received
• Discount allowed
• Loan interest
• Other expenses
• Drawings

Solutions

Expert Solution

Answer to Question:

Cash at Bank
Particulars	Amount(RM)	Particulars	Amount(RM)
To, Capital	7000	By, Rent	3500
To, Loan	1000	By,Shop Fitting	5000
To, Trade Receivable	2,480	By, Drawings	1500
To, Sales	10000	By, Other Expenses	1900
		By, Loan Interest	100
		By, Trade Payable	4950
		By, bal c/d	3,530
	20,480		20,480

Capital		Loan
Particulars	Amount(RM)	Particulars	Amount(RM)	Particulars	Amount(RM)	Particulars	Amount(RM)

To, Bal c/d	7,000	By,Cash at Bank	7000	To Bal c/d	1,000	By, Cash at Bank	1000
	7,000		7,000		1,000		1,000

Purchases

Trade Payables

Rent

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

To, Cash at Bank

4950

By, Purchases

5000

To, Trade Paybles

5000

By, P&L

5000

To, Discount Received

To, Cash at Bank

3500

By, P&L

3500

5,000

3,500

Shop Fittings

Sales

Trade Receivable

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

By, Cash at Bank

10000

To, Cash at Bank

2000

By, Bal c/d

2000

To, P&L

12500

By, Trade Receivable

2500

To, Sales

2500

By, Cash at Bank

2480

By, Discount allowed

2,000

12,500

2,500

Discount Received

Discount Allowed

Loan Interest

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

Particulars

Amount(RM)

To, Cash at Bank

100

By, P&L

100

To, P&L

By, Trade Payable

To, Trade Receivable

By, P&L

100

Other Expenses		Drawings
Particulars	Amount(RM)	Particulars	Amount(RM)	Particulars	Amount(RM)	Particulars	Amount(RM)

To, Cash at Bank	1900	By, P&L	1900	To, Cash at Bank	1500	By, P&L	1500


	1,900		1,900		1,500		1,500

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

You are the manager of the company ‘Home-fitness’ that specialises in selling fitness equipment for exercising...

You are the manager of the company ‘Home-fitness’ that specialises in selling fitness equipment for exercising at home. Review of the company’s recent financial performance suggests that there is a steady decline in demand for home fitness equipment as more people choose to go to the gym. Based on these results, the company has decided to reposition it’s brand image . a) Describe the product life cycle concept and outline the steps that Home-Fitness should take as sales start to...

Mr. Ali decided to set-up his own business of Shoe making. He needs raw materials, building,...

Mr. Ali decided to set-up his own business of Shoe making. He needs raw materials, building, equipment and machinery, and finance to meet up overhead expenses. He wants interest (Riba) free financing. How Islamic Banking can help him in this situation to meet his working capital needs? 1. Take any Islamic Bank working in Pakistan. 2. Explain what Islamic Financing products are available to help Ali? 3. In case, Ali needs long term financing then how Islamic bank can help...

Craig is trying to strike up business with GloboFlex, a fitness equipment company from another country....

Craig is trying to strike up business with GloboFlex, a fitness equipment company from another country. While he is presenting his innovative fitness product, he asks the crowd, "wouldn't you like a product like this?" As he asks the question, he points at a few of the people in the crowd. Later that day, Craig's contact at GloboFlex calls to tell him that the company has decided not to purchase his product. Which of the following most likely caused this...

A student is fed up with doing his PHYS400 problem set, so he throws his pen...

A student is fed up with doing his PHYS400 problem set, so he throws his pen up vertically at 10.64 m/s. How long does it take for the pen to reach its maximum height? Given that g=-9.8m/s^2 . Give your answer to 3 significant figures without units.

Lionel wants to set up a fund for his son's education such that he could withdraw...

Lionel wants to set up a fund for his son's education such that he could withdraw $1,295.00 at the beginning of every 3 months for the next 6 years. If the fund can earn 3.30% compounded semi-annually, what amount could he deposit today to provide the payment?

To set up the business, you will be required to purchase an equipment costing $40,000.00. You...

To set up the business, you will be required to purchase an equipment costing $40,000.00. You expect inventory will increase by $9,000 and accounts payable will increase by $5000.All the other working capital components will stay the same. So the change in net operating working capital is $4,000.00 at t= 0. You expect to keep the company for 4 years and you expect to sell 7000.00 units of Pickles at a unit price of $5.00 and believe that both prices...

Harry operated his own business selling pool equipment, materials and servicing swimming pools. Sales of equipment and...

Harry operated his own business selling pool equipment, materials and servicing swimming pools. Sales of equipment and materials were paid at the time of sale, however, pool services were carried out by his staff and invoices were left at the customer’s home and were generally paid by the homeowners within 30 days of service. Sales of equipment and materials and receipts for pool services were $930,000. Service calls which had been made during the prior year but paid in the current year were...

Allan set up a trading business, buying and selling goods. The following transactions took place in...

Allan set up a trading business, buying and selling goods. The following transactions took place in the first month of its trading, July 2020. Allan introduced $500,000 cash into the business bank account. The business bought a motor vehicle with price of $60,000. The payment was by cheque. The business bought some inventory for $30,000. The payment was by cheque. The entire inventory purchased in transaction #3 was sold $65,000 in cash. Additional inventory was purchased amounting to $100,000 on...

business law 21. Sunil and his brother Leandro set up an investment account with a bank,...

business law 21. Sunil and his brother Leandro set up an investment account with a bank, as Tenants in Common. Each puts $25,000 into the account, and they buy and sell stock together, splitting all interest and dividend income equally, and sharing any losses equally. After about thirty years of doing this, the account has grown to a total of about $200,000. Sunil got married, and had one child, Arjun. Sunil’s wife unfortunately died in 2015. Leandro has never married,...

Lou wants to set up his own landscaping business and needs to borrow $2500 to buy...

Lou wants to set up his own landscaping business and needs to borrow $2500 to buy equipment. He wants to keep on top of his payments so he would prefer to pay off the loan on a weekly basis. Option A: 2 year term at 3.99% Option B: 1 year term at 3.99% What effect does the term length have on his loan? What should he choose and why? (Answers will vary) Lou wants to set up his own landscaping...

Subjects