Transactions week 1	Effect on A = C+L
	Assets =	Capital	+ Liabilities
1. The owner starts the business with 10,000 paid into a business bank account on 1 April 20X2.	+10,000 (bank)	+10,000	0
2. The business buys an equipment for 4,000 (paid by cheque) on 2 April 20X2 using the bank account.	+4,000 (equipment) - 4,000(bank)	0	0
3. The business buys jumpers for resale for 2,500 (paid by cheque) on 3 April 20X2 using the bank account.	+2,500(jumper) - 2,500 (bank)	0	0
4. The business buys a sewing machine for 1,000 (paid by cheque) on 3 April 20X2 using the business account.	+1,000 (sewing machine) - 1,000 (bank)	0	0
5. The business buys fabric for resale for 1,500 on credit on 6 April 20X2.	+1,500 (fabric)	0	+1,500
6. The owner takes 100 from the bank for personal spending on 7 April 20X2.	-100(bank)	-100	0
Summary (overall effect)	+11,400	+9,900	+1,500

After this transaction the accounting equation becomes:

Assets = Capital + Liabilities

11,400 = 9,900 + 1,500

Part B.)

Transaction week 2	Effect on A= (C+ (I - C of S - E)) + L
	Assets =	(Capital + (Income - Cost of Sale - Expenses)) =	Liabilities =
Balance from week 1	+11,400	+9,900	+1,500
The owner pays half of the accounts payable (paid by cheque) on the 8 April 20X2.	0	+750	(Account payables) - 750
The owner pays 1,000 for two weeks rent (paid by cheque) on the 11 April 20X2.	0	-1,000 (rent expenses)	+1,000
The owner pays 200 (paid by cheque) for two weeks insurance on 11 April 20X2 using the business account.	0	-200 (insurance expense)	+200
The business made sales for 6,000 (sales made by 50% on cash and 50% on credit) on 14 April 20X2	+3,000 (cash) +3000 (accounts receivable)	+6,000 (sales)	0
Effect on sale	+1,500 (inventory)	+750 (Cost of goods sold)	+750
Summary (overall effect)	7,500	6,300	1,200

After this transaction the accounting equation becomes:

Assets = Capital + Liabilities

7,500 = 6,300 + 1,200

Part C.)

Sophia's business's gross profit and net profit during the first two weeks of trading:

Gross Profit = Sales - Cost of Sales Net Profit = Gross Profit - Expenses

Sales	6,000
Cost of sales	750
Gross Profit	5,250
Insurance / Rent Expenses	1,200
Net Profit	450

Based on your answers to (a)-(c) above, prepare the balance sheet for Sophia's personalised jumper business at 14 April.