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In: Accounting

QUESTION ONE We Send Couriers was established on January 1. The following transactions occurred during the...

QUESTION ONE

We Send Couriers was established on January 1. The following transactions occurred during the company’s most recent quarter.

  • Jan 1. Issued common stock for K80,000 cash.
  • Jan 2. Purchased equipment costing K82,000 financed by a long term loan from Cashrite 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 J Motors.
  • Mar 12. Collected K65,000 cash from customers on account.
  • Mar 20. Borrowed K90,000 by signing another long-term loan from Cashrite.
  • Mar 25. Paid K74,400 cash for equipment 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:

  1. Open the appropriate books of original entry and record the above transactions.

[10 Marks]

  1. Open the appropriate ledger accounts and post the accompanying transactions and close off at the end of the accounting period.

[10 Marks]

  1. Close off the accounts and prepare the Trial Balance as at 31 March.

[10 Marks]

  1. Prepare the Income statement and the statement of Financial Position for the quarter end.

[10 Marks]

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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