Govender Wholesalers entered into the following transactions during February 2016 (IGNORE VAT). They make use of the perpetual inventory system. Date Details 1 The owner made a capital contribution of R640 000 to his business. This was done by means of an electronic transfer from his personal account into the business' bank account. 8 Purchase trading inventory on credit for R153 500. Sell trading inventory for R32 160 cash. Goods were sold at a mark-up of 20% on cost. 12 15 Purchase a computer for R15 000 on credit for use in the business. 18 Services rendered by Govender Wholesalers on credit for R36 000. 24 The business paid back R50 000 of the inventory purchased on credit on 8 February. The debtor made full payment for the services rendered on credit on the 18 of February. 25 27 The owner takes inventory for his personal use with a selling price of R3 000. (Mark-up 50% on cost price.) 28 Pay staff salaries of R27 500. Required: Show the effect of each individual transaction on the accounting equation (A=E+L). For each transaction show: If the assets, equity or liabilities will increase (+) or decrease (-); and By what amount.

Govender Wholesalers entered into the following transactions during February 2016 (IGNORE VAT). They make use of the perpetual inventory system. Date Details 1 The owner made a capital contribution of R640 000 to his business. This was done by means of an electronic transfer from his personal account into the business' bank account. 8 Purchase trading inventory on credit for R153 500. Sell trading inventory for R32 160 cash. Goods were sold at a mark-up of 20% on cost. 12 15 Purchase a computer for R15 000 on credit for use in the business. 18 Services rendered by Govender Wholesalers on credit for R36 000. 24 The business paid back R50 000 of the inventory purchased on credit on 8 February. The debtor made full payment for the services rendered on credit on the 18 of February. 25 27 The owner takes inventory for his personal use with a selling price of R3 000. (Mark-up 50% on cost price.) 28 Pay staff salaries of R27 500. Required: Show the effect of each individual transaction on the accounting equation (A=E+L). For each transaction show: If the assets, equity or liabilities will increase (+) or decrease (-); and By what amount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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