Multi-StatementhardIAS/IFRS

Bluestone Traders - Merchandising Cycle: Journal, Ledgers and Trial Balance

Question

Bluestone Traders sells outdoor equipment and uses a perpetual inventory system. At June 1, 2025 its ledger showed: Cash $25,000, Inventory $6,000, and Share Capital - Ordinary $31,000. The following transactions occurred during June 2025.

Date	Transaction
June 2	Purchased merchandise on account from Apex Supply for $8,400, terms 2/10, n/30.
June 4	Sold merchandise on account for $6,200, terms 1/10, n/30. The cost of the merchandise sold was $3,700.
June 5	Paid $300 cash for freight on the June 2 purchase (terms were FOB shipping point).
June 8	Returned defective merchandise costing $900 to Apex Supply for full credit.
June 11	Paid Apex Supply the balance due, taking the purchase discount.
June 13	Received full payment from the June 4 customer within the discount period.
June 18	Purchased merchandise for $4,300 cash.
June 22	Sold merchandise for $5,400 cash. The cost of the merchandise sold was $3,200.
June 26	A cash customer returned goods sold on June 22 for a $700 refund. The goods (cost $400) were returned to inventory in saleable condition.
June 30	Paid monthly salaries of $2,900.

Instructions:

Journalize the June transactions using a perpetual inventory system.
Post to the Cash and Inventory ledger accounts (running balance format), starting from the June 1 balances.
Prepare a trial balance at June 30, 2025.

Statements in this challenge

Journal EntriesJournal Entry
Ledger AccountsLedger
Trial BalanceTrial Balance

Scoring

40% Account naming / line matching
40% Amount correctness
20% Structure / section placement

How to approach Accounting Cycle

IAS 1 — Presentation of Financial Statements

Work the cycle in its fixed order: journalise, post to the ledger, extract an unadjusted trial balance, pass adjusting entries, extract an adjusted trial balance, prepare the statements, then close the temporary accounts. Each step consumes the output of the one before it, so an error early on propagates all the way to the closing entries rather than staying local.

Common mistakes

Preparing the financial statements from the unadjusted trial balance instead of the adjusted one.
Closing permanent accounts — assets, liabilities and capital carry forward; only revenue, expense and drawings/dividends close.
Forgetting that the post-closing trial balance should contain no income statement accounts at all.

Further readingIAS 1: what goes where in a full set of statements

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