Question

Question 1 25 Marks
Malali Traders had the following transactions for 29 February 2020 financial year.
The following transactions was extracted from the books of Tesco Traders for February 2019.
1. Malali Traders borrowed N$ 18 400 from East Bank, and was deposited into AC Traders bank account. AC Traders’ is Malali Traders cement supplier.
2. Malali Traders acquired a Motor Vehicle on 01 February 2020 for N$ 10 600 from MZ Motors and it was paid on the 2nd March 2020 by cheque.
3. Sold goods on credit to Jayz Traders valued at N$ 28 000 and received a cheque of N$ 25 000 in full settlement of account on the 20 April 2020.
4. Purchased good for resale from NTN for N$ 8 000 and paid by cheque on 28 February 2020.
5. Cheque issued to NTN was dishonoured on the 29 February 2020 (see no.4 above).
6. Issued a debit note to Jayz on the 29 February 2020 for N$ 2 000.
7. Sold goods worth N$ 22 500 to SSS on credit, and SSS paid 10% deposit into Malali Traders Bank upon signing the sale contract on 07 February 2020.
8. Mr. Malali deposited N$ 11 000 into the business bank account on 01 February 2020 and in the same day he withdraws N$ 1 000 cash for business use.
9. Received Computers worth N$ 7 000 on 03 February 2020 as token of appreciation from Web Trader.
10. Sold goods valued at N$ 5 000 and received a cheque of N$ 4 750 from Unam in exchange for goods on 29 February 2020.
Required:
Page 12 of 14
Journalise the above transactions as at 29 February 2020: NARATIONS ARE NOT REQUIRED

Answer 1

Malali Traders

Journal Entries

1. borrowed $18400 from east bank and deposited into AC traders bank account, supplier

Bank Account    18400

   To Notes Payable    18400

Advance paid to Supplier/Accounts Payable 18400

To Bank Account 18400

( debit advance paid to supplier if the payment is made in advance towards purchase placed or debit accounts payable account if the payment is made towards previous accounts payable balance of supplier)

2. purchase of motor vehicle

On 1st February

Motor Vehicle Account    10600

To Accounts Payable 10600

On 2nd March

Accounts Payable    10600

To Bank Account 10600

3. Sold goods on credit

Accounts Receivable 28000

To Sales Account 28000

On 20, April 2020

Bank Account    25000

Sales Discount 3000

To Accounts Receivable 28000

4. Purchase of goods on credit

Purchases account/Inventory Account 8000

To Accounts Payable 8000

On 28th February

Accounts Payable    8000

To Bank Account    8000

5. Cheque issued to NTN was dishonored

Bank Account 8000

To Account Payable    8000

6. Issued a debit note

Jayz Account    2000

To Purchase return    2000

7.Sold goods on credit to SSS $22500 and received 10% on signing sales contract

On signing sales contract amount received

Bank Account 2250

To Advance received/Unearned Revenue    2250

On the day sales made

Account Receivable 20250

Advance received/Unearned revenue 2250

To Sales    22500

8.deposited cash into bank on 1 February 2020

Bank Account 11000

To Capital Account    11000

withdrew cash for business use

Cash Account 1000

To bank Account 1000

9. Received Computer worth $7000 from web traders

Computers Account 7000

To gain on receipt of donated asset/Contribution revenue    7000

10. Sold goods on credit

Accounts receivable 5000

To Sales 5000

On 29 February 2020

Bank Account    4750

Sales Discount 250

To Accounts receivable    5000.