Question

In: Accounting

Zamakulungisa is a hardware store that buys and sells all types of household equipment and electrical...

Zamakulungisa is a hardware store that buys and sells all types of household equipment and electrical appliances. The shop which is owned by Bandile Melane, is located at Mthatha Plaza shopping centre. Zamakulungisa started operating on the 1st of December 2019 and uses the perpetual inventory system account for inventory. The following transactions took place:

1. 1 December: Bandile Melane, the owner, contributed R100 000 cash to the business.

2. 1 December: The business obtained a loan of R150 000 at an interest rate of 15% p.a from Matshonisa Bank. The capital repayments will be made every 6 months. Interest will be paid monthly.

3. 4 December: Purchased stationery amounting to R2 125 on credit from Postdam Stationery.

4. 10 December: Sold 5 electrical heaters with a selling price of R400 each and with a cost of R200 each to Mrs Mail on credit.

5. 12 December: Mr Mthendeni visited the shop and purchased 12 big screen TV’s with a selling price of R7 000 each. The original cost price is R 4 000 for each TV. Mr Mthendeni paid 50% of the total amount and the balance will be paid in the month following the sale.

6. 16 December: Mrs Mail paid R1 000 to reduce her debt. (See transaction 5).

7. 17 December: The business bought inventory worth R120 000 from NMD Wholesalers on credit. All purchases made on credit are paid within 60 days.

8. 22 December: The business bought a delivery van from Auto Dealers for the value of R100 000 on credit.

9. 23 December: The business paid R30 000 for salaries and wages.

10.28 December: paid NMD Wholesalers R20 000 for partial settlement on the account. (See transaction 7).

11.31 December: Paid the interest on loan. (See transaction 2).

12.31 December: The owner withdraws R3 000 cash from the business bank account to buy his family new year’s presents

Required:

1.1. Record the above transactions in the relevant subsidiary journals.

1.2. Do all postings to the general ledger for the month of December 2019.

1.3. Prepare the trial balance for the month of December 2019

Solutions

Expert Solution

1. General Journal-

2. Subsidiary Ledgers -

3. Trial Balance -


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