1.1 Chris Nuts has a car repair business, Nuts and Bolts, that he started on 1 July 2020 after he lost his job during lockdown. The following are some of the transactions for the month of May 2021: Transaction number Transactions example Paid rent of R2 450 for the month of May 2021. 1 Bought consumables during the month for R9 600 on credit. All consumables are purchased for immediate use. 2 Took a loan of R50 000 from his uncle Spanner Hardman. The loan bears interest at 9% per year payable monthly. The loan capital is payable in two equal annual instalments, the first of which is payable on 31 May 2022. 3 Chris purchased electronic diagnostic equipment that had a marked price of R40 000 with a 10% cash discount offered. Chris paid cash for the equipment which he put to use immediately. 4 Services fees for the month were as follows: - Cash deposited into the bank account R32 400. - On credit to businesses given 30 day accounts: R17 300. 5 Paid monthly interest on the loan taken from Spanner Hardman. Refer transaction 2 above. 6 Transferred payment to settle the creditor’s account – Refer transaction 1. A 5% settlement discount was received. Required: 1.1 Prepare an accounting equation as the one illustrated below. Process the above transactions through the equation using + for increase in an element, use a - or use (brackets) for decreases and 0 for no effect. Chris does not have any overdraft facitlities.
1.1 Chris Nuts has a car repair business, Nuts and Bolts, that he started on 1 July 2020 after he lost his job during lockdown. The following are some of the transactions for the month of May 2021:
Transaction
number
Transactions
example
Paid rent of R2 450 for the month of May 2021.
1
Bought consumables during the month for R9 600 on credit. All consumables are purchased for immediate use.
2
Took a loan of R50 000 from his uncle Spanner Hardman. The loan bears interest at 9% per year payable monthly. The loan capital is payable in two equal annual instalments, the first of which is payable on 31 May 2022.
3
Chris purchased electronic diagnostic equipment that had a marked price of R40 000 with a 10% cash discount offered. Chris paid cash for the equipment which he put to use immediately.
4
Services fees for the month were as follows:
- Cash deposited into the bank account R32 400.
- On credit to businesses given 30 day accounts: R17 300.
5
Paid monthly interest on the loan taken from Spanner Hardman. Refer
transaction 2 above.
6
Transferred payment to settle the creditor’s account – Refer transaction 1. A 5% settlement discount was received.
Required:
1.1 Prepare an
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