Illustrative Question- Shane Brooks
On July 1, 2015, Shane Brooks established an interior decorating business, Premium Designs. During the month, the following transactions are completed:
July 1. Transferred cash from a personal bank account to be used for the business, $20,000.
3 Paid rent on office for the month, $1,600
10 Purchased a truck for $15,000, paying $5,000 cash up-front, and giving a note payable for the remainder amount
13 Purchased equipment on credit, $4,500.
14 Paid cash for supplies, $1,100.
15 Paid annual premiums on property and casualty insurance, $2,800.
15 Received cash from clients for job completed, $6,100
21 Paid creditor a portion of the amount owed for equipment purchased on July 13, $2,400
24 Recorded jobs completed on credit and sent invoices to clients, $8,600
26 Received invoice for truck expenses to be paid in September, $875
27 Paid utilities bills, $900
27 Paid cash for miscellaneous expenses, $315
29 Received cash from customers on credit, $4,100
30 Paid employees' wages $2,500.
31 Withdrew cash for personal use, $3,000
Instructions:
(1) Write up the ledger accounts using the "T" format for the above transactions, complete and balance the accounts.
(2) Write up the Trial Balance for the month end of July 31, 2015.
(3) Prepare the Income Statement for the period ending 31st July, 2015.
(4) Prepare the Statement of Financial Position as at 31st July, 2015.