An analysis of transactions for Foxes Ltd in August 2016, its first month of operations, is shown below. Each change in equity is explained. 

Required

(a) Describe each transaction.

(b) Determine how much equity increased for the month. (c) Calculate the profit for the month.

(d) Explain the relationship between profit and equity which is shown in the statement of financial position.

Transcribed Image Text:

Cash 1. +$34000 2. - 4000 3. -1100 4. +21 800 5. 6. 7. 8. 9. 10. -3000 -1000 -2750 +3 200 -5700 Accounts Office +Receivable + Supplies + Equipment +$5 600 -3 200 R. +$1 100 +$10 000 = Accounts Payable + +$6.000 -3000 +1500 Equity +$34 000 Issued share capital +27 400 Service revenue -1000 Dividends -2750 Rent expense -5 700 Salaries expense -1500 Electricity expense