F Polk, after being in Bakery business for some years without keeping proper records, now decides to keep a double entry set of books. On 1 September 2021 he establishes that his a
F Polk, after being in Bakery business for some years without keeping proper records, now decides to keep a double entry set of books. On 1 September 2021 he establishes that his assets and liabilities are as follows: Assets: Van £5,700, Fixtures £2,800, Stock £5,200, Debtors – P Mullen £105, M Abel £311, Bank £1060, Cash £85. Liabilities: Creditors – Syme Ltd £229, A Hill £80. He is not sure about Journal entries for the following transactions in September 2021 as follows: Sep 1: A debt of £105 owing from P Mullen was written off as a bad debt Sep 5: Office Fixtures originally bought by credit for £150 was returned to the supplier Syme Ltd., as it was unsuitable. Full allowance will be given for this. Recording Business Transactions BA30592E 2 | P a g e Sep 10: The business is owed £311 by M. Abel. He is declared bankrupt and we only received £180 cash in full settlement of the debt. Sep 18: Bought a Machinery from Brown Ltd. to use in the company. The total purchasing value of the machine is £1,800. The owner paid £100 cash, £500 by issuing a cheque and rest of the purchasing value would remain as credit. Sep 26 The owner paid half of the machinery debt to Brown Ltd. by issuing a cheque. Sep 28: The owner paid £130 an insurance bill via cheque thinking that it was in respect of the business. We now discover that £70 of the amount paid was in fact insurance of our private house. Required: You are required to show the Journal entries (only) (with narrative) necessary to record the following items which occur in Sep 2021.
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