Arthur Moore commenced business on 1 October by paying 50,000 into a newly opened business bank...

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Arthur Moore commenced business on 1 October by paying 50,000 into a newly opened business bank account. His transactions during the first three weeks of business were as follows; Purchased fixtures & fittings for cash 5,000 2 Oct 4 Oct Purchased goods for resale for cash 3,500 Purchased goods for resale, on credit from Mr Verity, for 12,000 7 Oct 8 Oct 10 Oct 11 Oct Purchased motor vehicle, on credit from Mrs Karic, for 11,000 Paid Mr Verity 12,000 Borrowed 5,500 from Ms Fortune and made first payment to Mrs Karic of 5,500 14 Oct Sold all the goods he bought on 4 Oct (purchase price 3,500) for cash 6,000 15 Oct Paid wages to temporary staff 900 16 Oct Sold half of the goods bought from Mr Verity on 7 Oct, to Mr Kay for 9,000 on credit 17 Oct Arthur agreed to allow his cousin John Moore to join him in the business. John Moore brought 5,000 of his own money into the business, which is used to pay part of the amount owed to Mrs Karic 18 Oct Because of John Moore's carelessness, a potential customer, Mr Lee, fell in Moore's office and broke his arm. Mr Lee threatened to sue the firm, so Arthur promised to pay Mr Lee 3,000 expenses for medical treatment a) Using a 'worksheet', show how the assets, liabilities and capital are affected by each transaction i.e. Date Assets Liabilities Equity Capital Cash Inv M.V. F&F Debtors Trade Accrued Loan Equity P&L Creditors Exp b) Draw up an Income Statement for the period and a Statement of Financial Position as at 18 October Arthur Moore commenced business on 1 October by paying 50,000 into a newly opened business bank account. His transactions during the first three weeks of business were as follows; Purchased fixtures & fittings for cash 5,000 2 Oct 4 Oct Purchased goods for resale for cash 3,500 Purchased goods for resale, on credit from Mr Verity, for 12,000 7 Oct 8 Oct 10 Oct 11 Oct Purchased motor vehicle, on credit from Mrs Karic, for 11,000 Paid Mr Verity 12,000 Borrowed 5,500 from Ms Fortune and made first payment to Mrs Karic of 5,500 14 Oct Sold all the goods he bought on 4 Oct (purchase price 3,500) for cash 6,000 15 Oct Paid wages to temporary staff 900 16 Oct Sold half of the goods bought from Mr Verity on 7 Oct, to Mr Kay for 9,000 on credit 17 Oct Arthur agreed to allow his cousin John Moore to join him in the business. John Moore brought 5,000 of his own money into the business, which is used to pay part of the amount owed to Mrs Karic 18 Oct Because of John Moore's carelessness, a potential customer, Mr Lee, fell in Moore's office and broke his arm. Mr Lee threatened to sue the firm, so Arthur promised to pay Mr Lee 3,000 expenses for medical treatment a) Using a 'worksheet', show how the assets, liabilities and capital are affected by each transaction i.e. Date Assets Liabilities Equity Capital Cash Inv M.V. F&F Debtors Trade Accrued Loan Equity P&L Creditors Exp b) Draw up an Income Statement for the period and a Statement of Financial Position as at 18 October

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Date BALANCE SHEET Assets Liabilities Equity cash inv mv ... View the full answer