A consortium of business people decided to start a taxi business in the centre of Durban.

Note 1: The consortium invested R200 000 as capital.

Transactions for the month:

1 Purchased a taxi on credit for R26 000.

2 Paid R164 000 in total for six additional taxis.

3 Purchased a building for R80 000, paying R15 000 cash and obtaining a bond from the bank for the balance.

4 Paid for inventory of petrol amounting to R20 500.

5 Paid wages and salaries of R14 200.

6 Banked the fares of R39 920 received for the month.

7 Paid interest of R800 on the bond and made a capital repayment of R200.

8 Bought stationery on credit for R400.

9 Paid R2 150 for servicing the taxis.

Additional information:

• At the end of the month, the unused petrol totalled R10 300 and the unused stationery totalled R300.

• The taxis were valued on the same day as mentioned above at R187 000 that represents cost less depreciation.

You are required to:

1. Record the above transactions and adjustments under the accounting equation. Your entries must show the effect on the accounting equation.

2. Prepare the statement of financial position and comment on the financial performance and financial position of the company after one month of business.