Question

At the end of last month, Ajax Inc. had the following balances in its accounts:
Cash $ 5,000
Inventory $10,000
Equipment $ 3,000
Land $10,000
Owe Jones $10,000
Common Stock $10,000
Retained Earnings $ 8,000
Set up the initial Balance Sheet for this month, make the appropriate entries for this month using the Accounting Equation, and show the ending Balance Sheet for this month. The following should be included for this month:
a. Buy inventory from Jones on credit for $10,000
b. Sell goods for $4,000
c. Sell common stock for $1,000
d. Pay wages of $2,000
e. Pay tax of $1,000
f. Sell goods to Smith on credit for $15,000
g. Pay rent of $100
h. Pay Jones $2,000
i. Depreciate equipment $200
j. Inventory at the end of the month is worth $7,000

Answer 1

Journal Entries
S/R No.	Particular	Debit $	Credit $
a.	Purchase A/c	10000
	to Jones		10000
b.	Cash A/c	4000
	to Sales A/c		4000
c	Cash A/c	1000
	to Sales A/c		1000
d.	Wages A/c	2000
	To Cash A/c		2000
e	Tax A/c	1000
	to Cash A/c		1000
f.	Smith A/c	15000
	to Sales A/c		15000
g	Rent A/c	100
	to Cash A/c		100
h	Jones A/c	2000
	To cash A/c		2000
i	Dep. A/c	200
	to cash A/c		200

Cash A/c
Particular	debit $	Particuler	Credit $
To opening Bal	5000	By Wages	2000
To Sales A/c	4000	By Tax	1000
		By Rent	100
		By Dep	200
		Closing Bal.	5700
Total	9000	Total	9000

Jones A/c
Particular	debit $	Particuler	Credit $
		Opening Bal	10000
To Cash A/c	2000	To Purchase A/c	10000
Closing Bal.	18000
Total	20000	Total	20000

Inventory Account
Particular	debit $	Particuler	Credit $
To Opening Bal	10000	to jones	2000
To jones A/c	10000
month end inventory	7000
		Closing Bal.	25000
Total	27000	Total	27000

Trial Balance sheet
Particular	debit $	Particuler	Credit $
purchases A/c	10000	Sales A/c	20000
Wages A/c	2000
Gross Profit	8000
Total	20000	Total	20000

Profit & Loss A/c
Particular	debit $	Particuler	Credit $
Tax	1000	Gross Profit	8000
Rent	100
Net Profit	6900
Total	8000	Total	8000

Balance Sheet
Liablities	$	Assets	$
capital jones	18000	Land	10,000
Common Stock	11000	Inventory	25000
net profit	6900	Equipment	3000
Retained Earnings	8,000	Cash	5700
Depriciation	200
Total	43700	Total	43700