Neco 2017 Financial Accounting Question 2

ABC Traders commenced business on 1 January with cash ₦200,000 and equipment purchased for ₦150,000 paid in cash. The following transactions occurred during January: 1. Purchased inventory on credit ₦120,000. 2. Sold goods costing ₦80,000 for ₦150,000; cash received ₦90,000 and the balance on credit. 3. Paid rent ₦20,000 cash. 4. Returned defective inventory worth ₦10,000 to the supplier and received a cash refund of ₦10,000. 5. Received cash from customers for credit sales amounting to ₦50,000. 6. Paid wages ₦15,000 cash. 7. Purchased equipment for ₦50,000, paying ₦30,000 cash and the remainder on credit. 8. The owner withdrew ₦25,000 cash for personal use. Using the information above, answer the following: (a) Record each transaction in the journal (include dates). (b) Post the journal entries to the appropriate ledger accounts and state the closing balance of each account. (c) Prepare a trial balance as at 31 January. (d) State whether the trial balance balances. If it does not, identify the error and suggest the correction.