financial accounting

Question

You are to enter the necessary accounts for the month of May 2007 from the following details, and then balance off the accounts and extract a trial balance as at 31 May 2007. 

2007 

May 

 1 Started firm with capital in cash £500 and cash at bank £9500. 

 4 Bought goods on credit from the following persons: D. Darma £410 and K.     

   Gibson £ 970. 

 5 Paid rent by cash £380 

 9 Sold goods on credit to : C. Carls £780, B. Booth £670. 

10 B. Booth paid us by cheque £600. 

12 Paid carriage by cash £50 

16 Received commission by cheque £340 

20 Paid D. Darma by cash £350. 

23 Received bank loan £2000. 

26 Cash sales £560 

27 Bought a motor van paying by cheque £2500. 

30 Proprietor brings a further cash £300 into the business .

Answer 1

It seems like there's information missing here which makes it difficult to answer. Nonetheless, I'll do my best to answer.

First step is the make a journal entry for each step. As an example, prompt 1 indicates that the firm was started with $500 in cash and $9,500 in the bank. So you'll debit cash for $10k and credit Paid in Capital for $10k (assuming we're not differentiating between cash and petty cash, which was my assumption based off the rest of the question).

Second step is to set up a proper trial balance: proper title, date, followed by assets, liabilities, equity, income, expenses, etc. You can set it up in two columns or have debit accounts as positive numbers and credit accounts as negative.

Third step is to make sure everything balances. Debits should always equal credits; if they don't, something went wrong.

I hope this gives you some general guidance without giving away the answer. I worked it out on an Excel file. Feel free to reach out and we can review in more detail.