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Question 2
Ahmad has started business as a sole trader on 1 October, 2020. The following transactions and events of trading for his first month are as follows:
Date Transaction
1 Started the business by introducing $360,000 into the business bank account.
3 Rent is paid by cheque $8,000 for the month.
9 Ahmad paid $40,000 in cash for a van.
11 Ahmad purchased goods costing $18,000 on credit from Sarah (invoice no. SR0123).
14 Ahmad sold goods for $7,000 in cash.
16 Ahmad sold goods for $8,000 on credit to Ali (invoice no. AL.0001)
25 Ahmad paid $17,100, taking advantage of a 5% settlement discount with respect to invoice no. SR0123.
28 Ali paid $7,760, taking advantage of a 3% settlement discount with respect to invoice no. AL.0001.
Required:
1- Enter the above transactions into their appropriate cash books.
2- Post the transactions directly into their appropriate nominal ledger accounts.
3- Prepare the trial balance as at October 31, 2020.
(18 marks)
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