UK help with understanding simple double entry booking - thank you

[lifeswonderful]

Hi

I am trying to teach my self double entry booking and I wanted to test it it out with a few simple values by placing them in there relavent DEBIT& CREDIT columns but I cannot get it to balance - what I am missing out? any help, guidence would really help me - thank you

these are the values I am using

OPENING BANK BALANCE 10000
OPENING STOCK COST 1000
SALES REVENUE 1000
CREDIT CARD FEE 50
NET SALES DEPOSIT (AFTER FEE) 950
CLOSING STOCK VALUE 500
CLOSING BANK BALANCE 10950

 

[DrStrangeLove]

From what you wrote, it looks like the following happened: You started with 10,000 GBP (since you're in the UK, right?) in the bank. You sold 500 GBP of the 1000 GBP worth of inventory you had at the start for 1000 GBP. The credit card company charged you 50 GBP, and you deposited the rest of the cash in the bank. Do I have that right?

So your initial balance sheet is:

Cash 10,000
Inventory 1,000
------------------------
Equity 11,000 (you haven't said if this is a corporation with shares or a sole proprietorship, so I'm assuming the latter.)

OK, so you sold 500 of inventory for 1000 in cash:

DR Cash 1000
CR Sales Revenue 1000

DR Cost of Goods Sold 500
CR Inventory 500

You paid a fee to the credit card company (in cash?):

DR Credit Card Fees 50
CR Cash 50

Now go through the mechanics of posting to the ledger, and tell me what your income statement and balance sheet look like.