he Morning Mist is a trader that has not maintained double entry accounting practices. The firm has provided the following accounting details for 2020 Summarized Cashbook Receipt from debtors 280,000 Bal b/d 60,000 Cash Sales 210,000 Office expense 20,000 Investment income 70,000 Wages 85,000 Disposal of equipment 30,000 Utilities 40,000 Bal c/d 85,000 Loan repayment 60,000 Payment to creditors 35,000 Insurance 35,000 Loan interest 30,000 Cash Purchases 60,000 Equipment 250,000 675,000 675,000 List of Balances DETAILS Jan. 01 Dec. 31 Wages prepaid 12,000 15,000 Investment income owing 22,000 35,000 Stock 45,000 50,000 Creditors 20,000 28,000 Equipment ( Book value ) 300,000 490,000 Machinery ( Book value ) 180,000 160,000 Motor vehicle ( Book value ) 185,000 178,000 Debtors 32,000 35,000 Office expenses owing 7,000 11,000 Insurance Prepaid 3,000 7,000 10% Loan 360,000 300,000 Utilities Owing 15,000 22,500 Additional Notes During the year bad debts amounting to 5,000 was written off Discounts of 7,000 was received from suppliers The equipment that was disposed of had a book value of 45,000 During the year there were stock drawings amounting to 12,000 Question : Use the above data to determine the opening owners’ equity

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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The Morning Mist is a trader that has not maintained double entry accounting practices. The firm has provided the following accounting details for 2020

Summarized Cashbook

Receipt from debtors	280,000	Bal b/d	60,000
Cash Sales	210,000	Office expense	20,000
Investment income	70,000	Wages	85,000
Disposal of equipment	30,000	Utilities	40,000
Bal c/d	85,000	Loan repayment	60,000
		Payment to creditors	35,000
		Insurance	35,000
		Loan interest	30,000
		Cash Purchases	60,000
		Equipment	250,000
	675,000		675,000

List of Balances

DETAILS	Jan. 01	Dec. 31
Wages prepaid	12,000	15,000
Investment income owing	22,000	35,000
Stock	45,000	50,000
Creditors	20,000	28,000
Equipment ( Book value )	300,000	490,000
Machinery ( Book value )	180,000	160,000
Motor vehicle ( Book value )	185,000	178,000
Debtors	32,000	35,000
Office expenses owing	7,000	11,000
Insurance Prepaid	3,000	7,000
10% Loan	360,000	300,000
Utilities Owing	15,000	22,500

Additional Notes

During the year bad debts amounting to 5,000 was written off
Discounts of 7,000 was received from suppliers
The equipment that was disposed of had a book value of 45,000
During the year there were stock drawings amounting to 12,000

Question :

Use the above data to determine the opening owners’ equity

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