John started his bike dealership, a sole proprietorship, on April 1, 2004, selling new and used bikes. The gross profit earned on new bike sales is 40%. John used $40,000 of his personal funds to start the business.
On April 1, the business buys $30,000 worth of new bikes from his supplier with cash.
On April 30th, customer brings in used bikes and business buys them for $7,500.
On June 30th, new bikes are sold for $30,000. Half of these sales are on account.
On June 30th, the business sells all the used bikes for $15,000 cash.
Record the above transactions into T-accounts for John. For recording the answers, use this Template.
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The solution examines creating t-accounts for a new bike dealership, where John is the sole proprietorship. The transactions are recorded into a T-account.