J Smith commenced business on 1 November 2012 with Premises $150,000, Bank 20,000, Plant & Machinery...

 

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J Smith commenced business on 1 November 2012 with Premises $150,000, Bank 20,000, Plant & Machinery $15,000, Inventory $10,000, Bank Loan $50,000 and Accounts Payable $8,000. Following are the transactions for the month of April after the commencement. i. 2 November: Purchased inventory for $5,000. ii. 4 November: J Smith made payment towards his bank loan for $2,000. ii. 9 November: Purchase Motor Vehicle for $10,000 was on credit. iv. 13 November J Smith purchased inventory on credit for $6,000. V. 16 November A laptop was purchased by J Smith for cash $900 vi. 19 November: J Smith paid the Accounts payable $10,000. vii. 21 November. J Smith took out $1,500 from the business for personal use. viii. 22 November. J Smith sold goods for cash $5000, the cost of goods sold was $3,500 ix. 30 November. J Smith paid wages $2,500 Instruction for the students: Process the above transactions (including the one for new business commencement) in the accounting equation format. Hint: Calculate opening Capital to balance the accounting equation at the commencement of the business. Date Assets Liabilities Owner Equity + (Revenue - Expenses) J Smith commenced business on 1 November 2012 with Premises $150,000, Bank 20,000, Plant & Machinery $15,000, Inventory $10,000, Bank Loan $50,000 and Accounts Payable $8,000. Following are the transactions for the month of April after the commencement. i. 2 November: Purchased inventory for $5,000. ii. 4 November: J Smith made payment towards his bank loan for $2,000. ii. 9 November: Purchase Motor Vehicle for $10,000 was on credit. iv. 13 November J Smith purchased inventory on credit for $6,000. V. 16 November A laptop was purchased by J Smith for cash $900 vi. 19 November: J Smith paid the Accounts payable $10,000. vii. 21 November. J Smith took out $1,500 from the business for personal use. viii. 22 November. J Smith sold goods for cash $5000, the cost of goods sold was $3,500 ix. 30 November. J Smith paid wages $2,500 Instruction for the students: Process the above transactions (including the one for new business commencement) in the accounting equation format. Hint: Calculate opening Capital to balance the accounting equation at the commencement of the business. Date Assets Liabilities Owner Equity + (Revenue - Expenses)