Question

Assume that you are the owner of a wholesale store and that you operate as a sole trader. On April 1, 2019 you had the following items in your business:

Stock, $14,500,000; Motor vehicles, $15,000,000; Creditors/Accounts payable- J. Downey $1,500,000, P. Wright $2,000,000; Cash in hand, $300,000; Pre-paid insurance, $80,000; Bank loan, $4,000,000; Furniture & fittings, $3,600,000; Accrued rent, $100,000; Cash at Bank, $12,000,000; Debtors/Accounts receivable-A. Howard $3,000,000, S. Simpson $2,800,000; K. Kirk $350,000.   

During April 2019 the following business were transacted:

April 1- Bought goods on credit from B. Burke $4,500,000.

          3- Paid rent with cheque $150,000.

          5- Sold goods on credit to A. Harvey, $5,600,000.

          7- Cash sales, $400,000.

        10- Paid electricity bill $130,000 cash.

        12- Paid J. Downey $1,000,000 by cheque.

        15- Sold goods on credit to S.Simpson, $7,000,000.

        15- Paid P. Wright $1,500,000 by cheque.

        18- S.Simpson paid $3,500,000 by cheque.

        19- Bought goods on credit from F. Smith, $2,400,000.

        22- Sold goods for cash to T. Royal, $1,800,000.

        24- Returned damaged goods valued at $300,000 to B.Burke.  

        25- Paid wages by cheque, $3,000,000.

        27- Paid insurance $70,000 cash.

        28- Paid $50,000 cash for transportation charge for goods bought from F. Daley.

        28- Received a cheque for $2,200,000 from A. Howard.

        29- Sold goods on credit to V. James, $6,200,000.

        29- Miscellaneous expenses paid with cheque, $1,250,000.

        29- Bought goods for cash from C. Croft for $350,000.

        30- Banked $1,000,000.

        30- A. Harvey returned incorrect goods delivered to him valued at $200,000.

        30- The balance on K. Kirk’s account was written off as irrecoverable.

        30- Received $300,000 cash as commission for selling goods for D. Riley.

         Notes:

(i)                 On April 30, 2019 stock on hand was valued at $11,000,000.

(ii)               Office furniture and motor vehicles are to be depreciated at 10% and 20% per annum respectively using the straight line method.

(iii)              $100,000 in rent was owed on April 30, 2019.

(iv)             On April 30, 2019 wages paid in advance amounted to $200,000.

(v)               There was no accumulated depreciation on fixed assets as at April 1, 2019.

Required:

Use the above information to prepare the following for the month of April 2019

(g)   The Sales Ledger.

(h)   The Purchases Ledger.

(i)     The General/Nominal Ledger.

                                                                                                                                

Answer 1

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Sales Journal
		Accounts Receivable Debit
Date	Customer Name	Sales Credit
Apr 5	A Harvey	$                          5,600,000
Apr 15	S. Simpson	$                          7,000,000
Apr 29	V James	$                          6,200,000
Total		$                        18,800,000
Purchase Journal
Date	Name of Vendor		Accounts Payable Cr	Inventory Dr
Apr 1	B Burke		$               4,500,000	$ 4,500,000
Apr 19	F Smith		$               2,400,000	$ 2,400,000
Total			$               6,900,000	$ 6,900,000
General Journal
Date	Account	Debit	Credit
Apr 3	Rent Expense	$                             150,000
	Cash		$                  150,000
Apr 7	Cash	$                             400,000
	Sale		$                  400,000
Apr 10	Utilities Expense	$                             130,000
	Cash		$                  130,000
Apr 12	Accounts Payable-J Downey	$                          1,000,000
	Cash		$               1,000,000
Apr 15	Accounts Payable-P Wright	$                          1,500,000
	Cash		$               1,500,000
Apr 18	Cash	$                          3,500,000
	Accounts Receivable S Simpson		$               3,500,000
Apr 22	Cash	$                          1,800,000
	Sale		$               1,800,000
Apr 24	Accounts Payable-B Burk	$                             300,000
	Inventory		$                  300,000
Apr 25	Wages Expense	$                          3,000,000
	Cash		$               3,000,000
Apr 27	Insurance Expense	$                               70,000
	Cash		$                     70,000
Apr 28	Inventory	$                               50,000
	Cash		$                     50,000
Apr 28	Cash	$                          2,200,000
	Accounts Receivable - A Howard		$               2,200,000
Apr 29	Miscellaneous Expense	$                          1,250,000
	Cash		$               1,250,000
Apr 29	Inventory	$                             350,000
	Cash		$                  350,000
Apr 30	Cash at Bank	$                          1,000,000
	Cash		$               1,000,000
Apr 30	Sales Return and Allowance	$                             200,000
	Accounts Receivable-A Harvey		$                  200,000
Apr 30	Bad Debt Expense	$                             350,000
	Accounts Receivable-K Kirk		$                  350,000
Apr 30	Cash	$                             300,000
	Commission Earned		$                  300,000