Question 1

Alan Richard is a wholesaler of electrical goods. Some of her business transactions, which occurred during the year ended 31
July 2008, are listed below.
1 Paid rent by cheque, $1200.
2 Purchased goods for resale on one month’s credit $7 200
3 Bought goods $1650 by cash.
4 Purchased furniture for business use on credit from AJ Furniture Ltd, $3 500 (debt to be repaid within 6 months)
5 Sold goods $5000 on credit to Angelina Ltd which had cost $2800.
6 Goods sold for cash $6 000 (mark up was 50%).
7 An old vehicle book value $5 000 was sold for $2 000 cash
8 Returned faulty goods to the supplier$700.
10 N Quinn returned unsatisfactory goods. These goods had been sold to Quinn for $67 (cost price was $50)
11 Returned some furniture to AJ Furniture Ltd $300
12 Paid surplus cash into bank $2000.
13 Cashed a cheque $1000.
14 Bank notified charges $36.
15 Alan invested $5000 into bank.
16 Alan had taken goods $58 from business for private use.
17 Alan transferred her private building worth $30 000 into business.
18 Alan took cash from bank $100 for his own use.
19 Received $59 cash from a customer on account.
20 Accepted a cheque for $1000 from a customer, Brad, in full settlement of his his debt, $1045.
21 Paid Wash Ltd by cheque in full settlement of the balance outstanding, $400, less a 5% cash discount.
22 Paid $22 from petty cash for window cleaning
23 Received a $3000 loan from N Faldo by cheque. No interest is to be charged, but the loan is to be repaid 31 July 2010.
24 Purchased a delivery van from Motors Traders Ltd for $5000. An old vehicle, book value $800, was accepted in part exchange by Motors
Traders Ltd at an agreed value of $800.Alan paid the balance owing by cheque.
25 Purchased a delivery van for $5 000. A deposit of $1 000 was paid by cheque and the balance is repayable in two months’ time.
26 Some stock was destroyed by fire. Cost price of this stock was $1 600. Alan Richard had agreed to accept $1 200 in full settlement of a claim
on the insurance company which had insured the stock.
27 Borrowed loan $25 000 from Foot Bank plc. $9 000 is payable in December 2007 and the remainder in December 2010
28 Fixed assets were depreciated by $2 500
29 Decrease provision for doubtful debts by $35.
30 Bad debts written off $250.

Copy and complete the table

Item Original Books of Accounts Accounts Effects on Effects on Effects on Effects on Effects on Effects on
Documents prime entry debited credited Current Current Working Net profit Owner’s Fixed assets
asset liabilities capital captal
1 Cheque Cash Book Rent Bank -$1200 No effect -$1200 -$1200 -$1200 No effect
book $1200 $1200
counterfoil

Item Original Books of Accounts Accounts Effects on Effects on Effects on Effects on Effects on Effects on
Documents prime entry debited credited Current Current Working Net profit Owner’s Fixed assets
asset liabilities capital captal