Accounting
On 1 April 2021, Michael commenced business as a plumber. His business is not registered for GST. He put into a business bank account his savings of $50,000. He also owns a van worth $11,000 which he uses solely for business purposes. Michael provided you with the following information. •
Debtors (Accounts Receivable) at 31 March 2022 were $21,000 and materials on hand cost $2,000. • During the year Michael had withdrawn $1,000 per month for housekeeping and had transferred $24,000 from the business bank account to deposit for ownership of an apartment he intends to live in. • New plant and machinery had a book value of $7,500 and there was a new delivery van at $20,000 which had been purchased on 1 March 2022. When Michael bought the new delivery van, he traded in his old van for $7,000; paid $11,000 cash and got a finance company loan for the balance. • Michael owed creditors $4,000 and had an overdraft at the bank of $5,200.
Required: Prepare a BALANCE SHEET as at 31 March 2022. Michael told you that he wants see the balance of each of the following accounts listed under Equity section of the balance sheet: Capital, Net Profit and Drawings.
