The following information relates to Old McDonalds Ltd for the month of January, 2014:
Jan. 1 Old McDonald books showed the following balances brought forward from December 31st, 2013 Capital $250,000, Cash $30,000, Bank $80,000 Land and building $140,000.
Jan. 2 Paid rent for January by cheque $4,000.
Jan. 3 Paid for office furniture by cheque$15,000.
Jan. 3 Bought goods for resale by cheque $20,000.
Jan. 3 Sold goods for cash $10,000.
Jan. 4 Sold goods on credit to V. Newman $4,000.
Jan. 5 Sold goods on credit to A. Russell $2,000.
Jan. 6 V. Newman settled his account with cash receiving a 2% cash discount.
Jan. 6 Goods valued at $250, sold for cash to A. Russell on January 5, was returned to Old McDonald as damaged. A credit note was given to A. Russell.
Jan. 7 Sold goods on credit to Success Ltd. $3,300.
Jan. 8 Bought goods on credit from A. Lowe $12,000.
Jan. 11 Bought stationery for cash $1,200.
Jan. 12 Paid wages by cash $1,000.
Jan. 15 Bought goods on credit from J. Morgan $7,500.
Jan. 18 Lodged cash of $9,500 to the business bank account.
Jan. 20 Paid A. Lowe $10,800 in full settlement of the balance outstanding by cheque having received a discount of$1,200.
Jan. 23 Purchased equipment on credit from Computer Ltd. for $50,000.
Jan. 27 Purchased goods on credit from A. Lowe for $8,000.
Jan. 30 Paid wages by cash $1,000.
REQUIRED:
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Prepare the opening journal entries for the transactions on January 1st.
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Post the above transactions in the General ledger and extract a trial balance for the period ending January 31st 2014.
- Prepare the Income statement and balance sheet for the period under review