1.1 Chris Nuts has a car repalr business, Nuts and Bolts, that he started on 1 July 2020 afterhe lost his Job during lockdown. The following are some of the transactions for the monthof May 2021:TransactionnumberTransactionsеxamplePald rent of R2 450 for the month of May 2021.1Bought consumables during the month for R9 600 on credit. Allconsumables are purchased for Immedlate use.2Took a loan of R50 000 from his uncle Spanner Hardman. The loan bearsInterest at 9% per year payable monthly. The loan capital is payable in twoequal annual Instalments, the first of which is payable on 31 May 2022.Chris purchased electronic diagnostic equipment that had a marked price ofR40 O00 with a 10% cash discount offered. Chris pald cash for theequipment which he put to use Immediately.Services fees for the month were as follows:Cash deposited Into the bank acoount R32 400.On credit to businesses given 30 day accounts: R17 300.Pald monthly Interest on the loan taken from Spanner Hardman. Refertransaction 2 above.6Transferred payment to settle the creditor's account - Refer transaction 1. A5% settlement discount was recelved.Required:1.1Prepare an accounting equation as the one Illustrated below. Process the abovetransactions through the equation using + for Increase In an element, use a- or use(brackets) for decreases and O for no effect. Chris does not have any overdraftfacitities.Format:TransAssets=Equity-LlabilitlesnumberRRRexample(2 450)Bank(2 450) Rent 1.2Chris, an ambitious person, wanted to expand his business and arrange hisadministration more effclentiy. The following are a couple of the questions he asked.Provide brief but clear explanations that satisty International Financlal ReportingStandards and other applicable regulations:1.2.1 What are source documents and how Important is it to keep them?1.2.2 What is the purpose of preparing financial statements and who, besidesthe owner, Is going to use them? Your explanation must Include twousers, other than owners, and briefly describe their needs.

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he lost his job during lockdown. The following are some of the transactions for the month of May 2021: Transaction number Transactions Paid rent of R2 450 for the month of May 2021. Bought consumables during the month for R9 600 on creait. All example consumables are purchased for immediate use. Took a loan of RS0 000 trom his uncie Spanner Hardman. The loan bears Interest at 9% per year payable monthiy. The loan capital is payable in two 2 equal annual instaiments, the first of which is payabie on 31 May 2022. Chris purchased electronic diagnostic equipment that had a marked price of R40 000 with a 10% cash discount offered. Chris pald cash for the equipment which he put to use immediately. Services fees for the month were as folows: Cash deposited into the bank account R32 400. On credit to businesses given 30 day accounts: R17 300. Pald montny interest on the loan taken from Spanner Hardman. Refer transaction 2 above. Transfemred payment to settie the creditors account - Refer transaction 1. A

he lost his job during lockdown. The following are some of the transactions for the month of May 2021: Transaction number Transactions Paid rent of R2 450 for the month of May 2021. Bought consumables during the month for R9 600 on creait. All example consumables are purchased for immediate use. Took a loan of RS0 000 trom his uncie Spanner Hardman. The loan bears Interest at 9% per year payable monthiy. The loan capital is payable in two 2 equal annual instaiments, the first of which is payabie on 31 May 2022. Chris purchased electronic diagnostic equipment that had a marked price of R40 000 with a 10% cash discount offered. Chris pald cash for the equipment which he put to use immediately. Services fees for the month were as folows: Cash deposited into the bank account R32 400. On credit to businesses given 30 day accounts: R17 300. Pald montny interest on the loan taken from Spanner Hardman. Refer transaction 2 above. Transfemred payment to settie the creditors account - Refer transaction 1. A

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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