2020 USS 3N POA EOY P1 Q1

2020 USS 3N POA EOY P1 Q1

1 Jamie, the owner of Jem Bookshop, extracted the following balances from the books of her business on 31 August 2020.

 

$

Trade receivables

9 900

Trade payables

10 100

Fixtures and fittings

36 800

Rental income

8 400

Sales revenue

75 500

Sales returns

3 200

Salaries expense

4 460

Inventory

8 700

Cost of sales

46 900

Cash at bank

6 360

Drawings

7 680

Capital

30 000

 

The following transactions took place during September 2020.

1. Goods costing $3 000 were sold on credit for $7 500.

2. Obtained a bank loan of $20 000. $8 000 was used to pay the staff salaries and the rest deposited into the business bank account.

3. Jamie issued a personal cheque of $4 000 to pay a credit supplier.

REQUIRED

a. State one reason for preparing a trial balance.

[1]

b. Prepare a trial balance for Jem Bookshop as at 30 September 2020. Show all workings.

[9]

[TOTAL 10]

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To ensure arithmetic accuracy in recording transactions.
To facilitate the preparation of the financial statements.

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