You are to enter up the necessary accounts for the month of May from the following information relating to a small printing firm. Then balance off the accounts and extract a trial... You are to enter up the necessary accounts for the month of May from the following information relating to a small printing firm. Then balance off the accounts and extract a trial balance as at 31 May 2013. Read more

Steps to Solve

1. Record Initial Capital Start by recording the initial capital. The firm started with cash of £1,800 and £4,200 in the bank.

   • Cash Account: £1,800
   • Bank Account: £4,200

2. Record Transactions Enter each transaction in the respective accounts.

   1. Purchased goods on credit from J. Ward for £610:

      • Debit Purchases £610
      • Credit J. Ward £610

   2. Purchased goods on credit from P. Green for £515:

      • Debit Purchases £515
      • Credit P. Green £515

   3. Purchased goods on credit from M. Taylor for £174:

      • Debit Purchases £174
      • Credit M. Taylor £174

   4. Purchased goods on credit from S. Gemmill for £345:

      • Debit Purchases £345
      • Credit S. Gemmill £345

   5. Sold goods on credit to J. Sharpe for £340:

      • Debit J. Sharpe £340
      • Credit Sales £340

   6. Sold goods on credit to G. Boycott for £720:

      • Debit G. Boycott £720
      • Credit Sales £720

   7. Sold goods on credit to F. Titmus for £1,152:

      • Debit F. Titmus £1,152
      • Credit Sales £1,152

3. Record Cash Transactions Record cash transactions as follows:

   1. Cash received from sales £410:

      • Debit Cash £410
      • Credit Sales £410

   2. J. Sharpe paid his account by cheque £340:

      • Debit Bank £340
      • Credit J. Sharpe £340

   3. Paid M. Taylor and J. Ward by cheque for £174 and £610 respectively:

      • Debit M. Taylor £174
      • Debit J. Ward £610
      • Credit Bank £784

   4. Paid carriage in cash £38:

      • Debit Carriage £38
      • Credit Cash £38

   5. Bought goods on credit from P. Green for £291:

      • Debit Purchases £291
      • Credit P. Green £291

   6. Bought goods on credit from S. Gemmill for £940:

      • Debit Purchases £940
      • Credit S. Gemmill £940

   7. Sold goods on credit to G. Boycott for £810:

      • Debit G. Boycott £810
      • Credit Sales £810

4. Record Rent Payments Record the rent payments:

   1. Paid rent by cash £490:
      • Debit Rent £490
      • Credit Cash £490

5. Balance Accounts Before extracting the trial balance, calculate the closing balances for all accounts. Sum debits and credits for each account.

6. Extract Trial Balance List the balances of all accounts in the trial balance format. Ensure the total debits equal total credits.