Question

help me please !!

ABC Company was formed on May 1, 2017. The following transactions took place during the first month. 1. Shareholders invested £46,200 cash in exchange for ordinary shares. Hired two employees to work in the warehouse. They will each be paid a salary of £2,820 per month. 2. 3. Signed a 2-year rental agreement on a warehouse; paid £24,310 cash in advance for the first year. Purchased furniture and equipment costing £31,470. A cash payment of £6,000 was made immediately; the remainder will be paid in 6 months Paid £1,668 cash for a one-year insurance policy on the furniture and equipment. Purchased basic office supplies for £927 cash. Purchased more office supplies for £1,308 4. 5. 6. 7. on account. 8. Total revenues recognized were £17,080-£4,650 cash and £12,430 on account. Paid £379 to suppliers for accounts payable due. 10. Received £2,780 from customers in payment of accounts receivable. Received utility bills in the amount of £283, to be paid next month. 12. Paid the monthly salaries of the two employees, totalling £5,640. Use the following list of accountants: Accounts Payable, Accounts Receivable, Advertising Expense, Buildings, Cash, Dividends, Equipment, Gaso line Expense, Insurance Expense, Land, Maintenance and Repairs Expense, Miscellaneous Expense, Mortgage Payable, Notes Payable, Prepaid Insurance, Prepaid Rent, Rent Expense, Rent Revenue, Retained Earnings, Salaries and Wages Expense, Salaries and Wages Payable, Service Revenue, Share Capital-Ordinary, Supplies, Supplies Expense, Unearned Service Revenue, Utilities Expense Instructions: Journalize the above transactions (12 marks) a. Post the entries to the ledger accounts. (11 marks). b. Prepare a trial balance on May 31, 2017 (5 marks) C d. Prepare an Income statement and a Retained Earnings Statement for the month of 4+2+6) May, 2017 and a Balanced Sheet on May 31, 2017 (12 marks

Answer 1

a. In the books of ABC Company:

Transaction / Event	Account Titles	Debit	Credit
1.	Cash	46,200
	Share Capital - Ordinary		46,200
2.	No journal entry required	0	0
3.	Prepaid Rent	24,310
	Cash		24,310
4.	Equipment	31,470
	Cash		6,000
	Accounts Payable		25,470
5.	Prepaid Insurance	1,668
	Cash		1,668
6.	Supplies	927
	Cash		927
7.	Supplies	1,308
	Accounts Payable		1,308
8.	Cash	4,650
	Accounts Receivable	12,430
	Service Revenue		17,080
9.	Accounts Payable	379
	Cash		379
10.	Cash	2,780
	Accounts Receivable		2,780
11.	Utilities Expense	283
	Accounts Payable		283
12.	Salaries and Wages Expense	5,640
	Cash		5,640

c.

ABC Company Trial Balance May 31, 2017
Account Titles	Debit	Credit
Cash	14,706
Accounts Receivable	9,650
Supplies	2,235
Prepaid Rent	24,310
Prepaid Insurance	1,668
Equipment	31,470
Accounts Payable		26,682
Share Capital: Ordinary		46,200
Service Revenue		17,080
Salaries and Wages Expense	5,640
Utilities Expense	283
Totals	$ 89,962	$ 89,962

d.

ABC Company Income Statement For the month ended May 31, 2017
Service Revenue		$ 17,080
Operating Expenses
Salaries and Wages Expense	5,640
Utilities Expense	283
Total Operating Expenses		5,923
Operating Income		11,157

ABC Company Statement of Retained Earnings For the month ended May 31, 2017
Balance, May 1	0
Net Income	11,157
Less: Dividends	0
Balance, May 31	11,157

ABC Company Balance Sheet May 31, 2017
Assets			Liabilities & Owner's Equity
Cash	14,706		Accounts Payable	26,682
Accounts Receivable	9,650		Total Current Liabilities		26,682
Supplies	2,235		Long Term Liabilities		0
Prepaid Rent	24,310		Total Liabilities		26,682
Prepaid Insurance	1,668
Total Current Assets		52,569	Share Capital: Ordinary	46,200
			Retained Earnings	11,157
Equipment		31,470	Total Owner's Equity		57,357
Total Assets		84,039	Total Liabilities and Owner's Equity		84,039