Question

Gateway Ltd sets up a company and in the first nine days of trading the following transactions occurred
1 January
They issue $10,000 share capital for cash
2 January
They purchase goods for $4,000 and pay by cheque
3 January
They buy delivery van for $2,000 and pay by cheque
4 January
They purchase $1,000 of goods on credit
5 January
They sell goods for $1,500 cash
6 January
They sell all remaining goods for $5,000 on credit
7 January
They pay $800 to suppliers by cheque
8 January
They pay rent of $200 by cheque
Required
1. Complete the relevant ledger accounts
2. Extract a trial balance

Answer 1

1. The completion of the relevant ledger accounts for Gateway Ltd is as follows:

Cash Account

Date            Account Titles             Debit       Credit

January 1: Common Stock          $10,000

January 2: Inventory                                     $4,000

January 3: Delivery Van                               $2,000

January 5: Sales Revenue           $1,500

January 7: Accounts Payable                        $800

January 8: Rent Expense                              $200

Balance                                                       $4,500

Accounts Receivable

Date            Account Titles             Debit       Credit

January 6   Sales Revenue           $5,000

Inventory

Date            Account Titles             Debit       Credit

January 2    Cash                          $4,000

January 4    Accounts Payable       1,000

January 6   Cost of goods sold                   $5,000

Delivery Van

Date            Account Titles             Debit       Credit

January 3    Cash                         $2,000

Accounts Payable

Date            Account Titles             Debit       Credit

January 4    Inventory                                  $1,000

January 7    Cash                          $800

Balance                                         $200

Common Stock

Date            Account Titles             Debit       Credit

January 1     Cash                                         $10,000

Sales Revenue

Date            Account Titles             Debit       Credit

January 5   Cash                                            $1,000

January 6   Accounts Receivable                  5,000

Balance                                         $6,000

Cost of goods sold

Date            Account Titles             Debit       Credit

January 6    Inventory                  $5,000

Rent Expense

Date            Account Titles             Debit       Credit

January 8   Cash                            $200

2. The extraction of a trial balance for Gateway Ltd is as follows:

Trial Balance

As of January 9

Account Titles             Debit       Credit

Cash                            $4,500

Accounts Receivable   5,000

Delivery Van                2,000

Accounts Payable                         $200

Common Stock                           10,000

Sales Revenue                             6,500

Cost of goods sold     5,000

Rent Expense                200

Totals                      $16,700   $16,700

Data Analysis:

January 1: Cash $10,000 Common Stock $10,000

January 2: Inventory $4,000 Cash $4,000

January 3: Delivery Van $2,000 Cash $2,000

January 4: Inventory $1,000 Accounts Payable $1,000

January 5: Cash $1,500 Sales Revenue $1,500

January 6: Accounts Receivable $5,000 Sales Revenue $5,000

January 7: Accounts Payable $800 Cash $800

January 8: Rent Expense $200 Cash $200

Learn more about extracting a trial balance at https://brainly.com/question/14604253