Photo AI

This is a Book of First Entry, Ledger and Trial Balance Question - Junior Cycle Business Studies - Question 1 - 2015

Question icon

Question 1

This-is-a-Book-of-First-Entry,-Ledger-and-Trial-Balance-Question-Junior Cycle Business Studies-Question 1-2015.png

This is a Book of First Entry, Ledger and Trial Balance Question. Answer all parts of this question: BRIGHT Ltd, an electrical business, had both credit and cash t... show full transcript

Worked Solution & Example Answer:This is a Book of First Entry, Ledger and Trial Balance Question - Junior Cycle Business Studies - Question 1 - 2015

Step 1

Record the following credit transactions in the Sales and Purchases Books of BRIGHT Ltd for the month of May 2015.

96%

114 rated

Answer

To record the transactions in the Sales and Purchases books for Bright Ltd, we must calculate the total amounts including VAT for each transaction:

  1. Sales Book Entry for WATT Ltd:

    • Date: 1/5/2015
    • Invoice No: 20
    • Amount: €44,000
    • VAT (23%): €10,120
    • Total: €54,120
  2. Purchases Book Entry from DIM Ltd:

    • Date: 10/5/2015
    • Invoice No: 91
    • Amount: €26,000
    • VAT (23%): €5,980
    • Total: €31,980
  3. Sales Book Entry for WATT Ltd:

    • Date: 19/5/2015
    • Invoice No: 21
    • Amount: €37,000
    • VAT (23%): €8,510
    • Total: €45,510

After recording these entries, the summary for the Sales and Purchases books will be:

  • Total Sales: €99,630
  • Total Purchases: €31,980.

Step 2

Record the following Transactions for the month of May 2015 in the Analysed Cash Book of BRIGHT Ltd.

99%

104 rated

Answer

For the Analysed Cash Book of BRIGHT Ltd, we will categorize the transactions into Debit and Credit sides:

Debit Side:

  1. Shareholder Investment:

    • Date: 7/5/2015
    • Receipt No: 6
    • Amount: €105,000
  2. Sales Income:

    • Date: 31/5/2015
    • Amount: €25,830

Credit Side:

  1. Purchases for Resale:

    • Date: 12/5/2015
    • Cheque No: 30
    • Amount: €25,000 + VAT €5,750
    • Total: €30,750
  2. Wages Paid:

    • Date: 17/5/2015
    • Cheque No: 31
    • Amount: €27,000
  3. Payment to WATT Ltd:

    • Date: 28/5/2015
    • Receipt No: 7
    • Amount: €75,000

The total for the Analysed Cash Book entries will be derived cumulatively during the balancing process.

Step 3

Balance the accounts on 31 May 2015 and extract a Trial Balance as at that date.

96%

101 rated

Answer

To balance the accounts and extract the Trial Balance as at 31 May 2015, we need to summarize all debits and credits:

  1. Total Debits:

    • Bank: €148,080
    • Purchases: €51,000
    • Sales: €102,000
    • WATT Ltd: €24,630
    • VAT: €23,460
    • Share Capital: €105,000
  2. Total Credits:

    • Bank: €148,080
    • Purchases: €51,000
    • Sales: €102,000
    • WATT Ltd: €24,630
    • VAT: €23,460
    • DIM Ltd: €31,980

Trial Balance as at 31/05/2015:

DR €CR €
148,080148,080
51,00051,000
102,000102,000
24,63024,630
105,000105,000
23,46023,460
31,98031,980
------------------------
The debits and credits should equal, confirming the accounts are balanced.

Join the Junior Cycle students using SimpleStudy...

97% of Students

Report Improved Results

98% of Students

Recommend to friends

100,000+

Students Supported

1 Million+

Questions answered

;