Page 357 - F3 -FA Integrated Workbook STUDENT 2018-19

Answers

Chapter 4

Example 1

Trade discount

Mylee entered into the following transactions:

1 Paid $10,000 capital into a business bank account to start a business

2 Paid $1,200 for rent of shop premises

3 Purchased goods for resale at a cost of $2,000

4 Sold goods which had cost $300 for $500

Required:

For each of the transactions, state the accounting entries required and
show how they would be recorded in ledger accounts.

Solution

Accounting entries

Debit $ Credit $
1 Cash 10,000 Capital 10,000

2 Rent 1,200 Cash 1,200
3 Purchases 2,000 Cash 2,000
4 Cash 500 Sales revenue 500

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