I need a ledger and a trial balance, but idk how to do it for this one...
Bought goods from Bilal for $3000 less 20% trade discount. Bilal allowed Adeel 5% cash discount.
Sold goods to Imran for $800 less 10% trade discount. He allowed Imran 5% cash discount.
Bought goods from Asad for $1300 less 20% trade discount. Asad allowed Adeel
Purchased a delivery van on credit from Syed for $6000. The invoice for the van was no:324.
Returned goods which had cost $100 to Bilal.
Sold goods to Raza for $1100 less 20% trade discount.He allowed Raza 5% cash discount.
Imran returned goods which had cost him $60.
Purchased goods from Asma for $4000 less 25% trade discount.Asma allowed Adeel 5% cash discount.
Sold goods to Asma for $1500 less 20% trade discount. He allowed Amna 5%cash discount
Sold goods to Raza for $1600 less 20% trade discount. He allowed Raza 5%cash discount
Returned goods which had cost him $600 to Asma.
Amna returned goods which had cost her $300
Purchased goods from Bilal for $4000 less 20% trade discount.Bilal allowed Adeel 5% cash discount
Adeel settled all accounts he owed by cheque, and received cheque for all amounts owing by his customers. All discounts were taken.
To prepare a ledger and a trial balance for the given transactions, we need to follow a step-by-step process.
1. Create a ledger:
- Start by creating ledger accounts for each category, such as "Purchases," "Sales," "Cash," "Accounts Receivable," "Accounts Payable," etc.
- Record all the transactions in their respective ledger accounts based on their nature (credit or debit).
2. Use the information provided to record the transactions in the appropriate ledger accounts:
- For example, to record the purchase of goods from Bilal, you would debit the "Purchases" account and credit the "Accounts Payable" account for $3000.
- Similarly, for the trade discount, you would debit the "Discount Received" account (expense account) and credit the "Purchases" account for $600 (20% of $3000).
3. Calculate the balances of each ledger account:
- For each transaction, update the balance in the respective ledger account by considering the debits and credits.
- Make sure to follow the double-entry bookkeeping principle - for every debit entry, there must be a corresponding credit entry.
4. Prepare a trial balance:
- After recording all the transactions and updating the ledger accounts, prepare a trial balance.
- A trial balance is a list of all ledger accounts with their respective balances (debits or credits).
- The total debits and total credits should match in the trial balance if the books are balanced.
To prepare the ledger and trial balance, let's go through each transaction one by one:
1. Bought goods from Bilal for $3000 less 20% trade discount.
- Debit: Purchases ($3000)
- Credit: Accounts Payable ($2400) [20% discount, so $3000 - $600 = $2400]
2. Bilal allowed Adeel 5% cash discount.
- Debit: Accounts Payable ($2400)
- Credit: Discount Received ($120) [5% cash discount, so $2400 * 5% = $120]
3. Sold goods to Imran for $800 less 10% trade discount.
- Debit: Accounts Receivable ($800)
- Credit: Sales ($800)
- Debit: Discount Allowed ($80) [10% trade discount, so $800 * 10% = $80]
4. Imran returned goods which had cost him $60.
- Debit: Sales Returns ($60)
- Credit: Accounts Receivable ($60)
5. Bought goods from Asad for $1300 less 20% trade discount.
- Debit: Purchases ($1300)
- Credit: Accounts Payable ($1040) [20% discount, so $1300 - $260 = $1040]
Repeat these steps for the remaining transactions to record all the necessary information and update the respective ledger accounts.
Once you have completed all the transactions and updated the ledger accounts accordingly, you can prepare a trial balance. The trial balance should list all the ledger accounts with their respective balances (debit or credit) to check whether they are in balance.
Remember, accuracy in recording the transactions and updating the ledger accounts is crucial for preparing an accurate trial balance.