Problem
Edwards Gardening Services (EGS) commenced its operation on 1 July 2022. The following information relates to EGS for the month of July 2022:
July 1 Edwards contributed $50,000 cash to the business.
1 EGS purchased gardening equipment from ABC Ltd for $35,000. EGS paid a $5,000 deposit with the balance to be paid within 30 days.
7 EGS invoiced a customer $500 for gardening service provided.
10 EGS paid $6,000 cash for a 12-month insurance policy. EGS uses an ASSET approach to record this payment.
15 A customer paid $1,000 to EGS for gardening service to be performed in August 2022. EGS uses a LIABILITY approach to record this transaction.
20 Edwards withdrew $3,000 cash from the business bank account for personal use.
23 EGS paid 30% of the amount owed to ABC Ltd in relation to the purchase of gardening equipment on 1 July.
30 Provided gardening service to customers. Received $2,000 in cash and an additional $4,000 was owed by the customers.
31 Received the July electricity bill amounting to $400. The bill is due on 15 August 2022.
1. Prepare general journal entries for the business for the month of July 2022. Narrations are NOT required.
2. Calculate the balance of the Accounts payable account as at 31 July 2022.
3. Calculate the total income earned by EGS for the month of July 2022.