Accounting

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,