Question (Financial Accounting):
XYZ Limited began operations on January 1, 2024. The following transactions occurred during its first month of business:
- The owner invested $120,000 cash into the business.
- Purchased equipment worth $60,000, paying $20,000 in cash and the balance on credit.
- Purchased inventory costing $25,000 on credit.
- Made cash sales of $30,000 (the cost of goods sold was $15,000).
- Paid salaries of $5,000 and utilities of $2,000.
- Paid $10,000 of the amount owed to suppliers.
- Recorded depreciation on equipment at 10% per annum (use straight-line method, assume no salvage value).
Required:
- Prepare journal entries for the above transactions.
- Post the transactions to the ledger accounts.
- Prepare a trial balance as of January 31, 2024.
- Prepare an Income Statement and Statement of Financial Position for the month ended January 31, 2024.