Overview
Question:
XYZ Ltd. sells electronic gadgets. On January 1, 2024, they had the following balances in their accounts:
Cash: $10,000
Accounts Receivable: $5,000
Inventory: $15,000
Accounts Payable: $8,000
Common Stock: $10,000
Retained Earnings: $12,000
During the month of January 2024, the following transactions occurred:
Purchased additional inventory on credit for $7,000.
Sold inventory costing $6,000 for $10,000 in cash.
Collected $3,000 from accounts receivable.
Paid $4,000 towards accounts payable.
Paid $1,500 in rent expense.
Declared and paid a dividend of $500.
Tasks:
Prepare journal entries for each transaction.
Post the entries to the ledger accounts.
Prepare a trial balance as of January 31, 2024.
Determine the ending balance of retained earnings on January 31,