Suppose you began a business as a wholesaler of Auto Parts In Lisbon. The following events have occurred (the symbol € represents the euro, the European currency):

1. On March 1, 20X1, you invested €80,000 cash in your new sole proprietorship, which you call Autopartes Lisbon.

2. You acquired €10,000 inventory for cash.

3. You acquired €8,000 inventory on open account.

4. You acquired equipment for €15,000 in exchange for a €5,000 cash down payment and a €10,000 promissory note.

5. A large retail store, which you had hoped would be a big customer, discontinued operations.

6. You take tires home for your family car. Autopartes Lisbon’s inventory carried the tires at €600. (Regard this as taking part of your capital out of Autopartes Lisbon.)

7. Parts that cost €300 in transaction 2 were damaged in shipment. You returned them and obtained a full cash refund.

8. Parts that cost €800 in transaction 3 were the wrong size. You returned them and obtained parts of the correct size in exchange.

9. Parts that cost €500 in transaction 3 had an unacceptable quality. You returned them and obtained full credit on your account.

10. You paid €2,000 on the promissory note.

11. You use your personal cash savings of €5,000 to acquire some equipment for Autopartes Lisbon. You consider this to be an additional investment in your business.

12. You paid €3,000 on open account.

13. Two transmission manufacturers who are suppliers for Autopartes Lisbon announced a 7% rise in prices, effective in 60 days.

14. You use your personal cash savings of €1,000 to acquire a new TV set for your family.

15. You exchange equipment that cost €4,000 in transaction 4 with another wholesaler. However, the equipment received which is almost new, is smaller and is worth only €1,500. Therefore, the other wholesaler also pays you €2,500 in cash. (You recognize no gain or loss on this transaction.)

Required 

1. By using Exhibit as a guide, prepare an analysis of Autopartes Lisbon’s transactions for March. Confine your analysis to the effects on the financial position of Autopartes Lisbon.

2. Prepare a balance sheet for Autopartes Lisbon as of March 31, 20X1.

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Description of Transactions Assets Liabilities Owner's Equity Lopez, Cash nventory +EquipmentPayable Payable Capital Merchandise Store Note Accounts (1) Initial investment (2) Loan from ban!k (3) Acquire store equipment +400.000 +400.000 +100,000 = +100,000 15,000 (4) Acquire inventory for cash-120,000 for cash +15,000 = +120,000 +10,000 +30,000 (5) Acquire inventory on credit +10,000 (6) Acquire inventory for cash plus credit (7) Sale of equipment (8) Return of inventory -10,000 +1,000 +20,000 -1,000 acquired on January 6 (9) Payment to creditor Balance ,January 12, 20X2 -800 4,000 352,000 + -800 -4,000 25, 200+ 159,200 + 14.000 100.000 + 400.000 = 525,200 525,200