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This is a Books of First Entry, Ledger and Trial Balance Question - Junior Cycle Business Studies - Question 1 - 2016

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This is a Books of First Entry, Ledger and Trial Balance Question. Answer all parts of this question: GOLD Ltd, a plumbing business, had both credit and cash trans... show full transcript

Worked Solution & Example Answer:This is a Books of First Entry, Ledger and Trial Balance Question - Junior Cycle Business Studies - Question 1 - 2016

Step 1

Record the following Credit Transactions in the Purchases and Sales Books of GOLD Ltd for the month of May 2016.

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Answer

In the Purchases Book:

DateDetailsInvoice No.Net (€)VAT (€)Total (€)
01/05/2016HAND Ltd660,00013,80073,800
20/05/2016HAND Ltd1716,0003,68019,680

In the Sales Book:

DateDetailsInvoice No.Net (€)VAT (€)Total (€)
12/05/2016SUM Ltd9448,00011,04059,040

Step 2

Record the following Bank Transactions for the month of May 2016 in the Analysed Cash Book of GOLD Ltd.

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In the Analysed Cash Book:

Receipts Side:

DateDetailsBank (€)Sales (€)VAT (€)Share Capital (€)
06/05/2016Share Capital110,000110,000
10/05/2016Sales55,35055,35010,350

Payments Side:

DateDetailsBank (€)Purchases (€)VAT (€)Creditors (€)Insurance (€)
16/05/2016HAND Ltd54,00054,000
27/05/2016Purchases for resale8,3008,3001,909
31/05/2016Insurance12,00012,000

Step 3

Balance the accounts on 31 May 2016 and extract a Trial Balance as at that date.

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To balance the accounts on 31 May 2016:

  1. Add up the totals from the Receipts and Payments sides of the Analysed Cash Book to find the closing balances.
  2. Prepare the Trial Balance:
AccountDr (€)Cr (€)
Share Capital110,000
Sales93,000
HAND Ltd39,480
Bank52,610
SUM Ltd59,040
Purchases114,000
VAT4,830
Insurance12,000
Total242,480242,480

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