On 1 March, Joe Conday started a new business. During March, he carried out the

Question

On 1 March, Joe Conday started a new business. During March, he carried out the following transaction: 1 March deposited $20,000 in a newly opened bank account. 2 March bought fixtures and fittings for $6,000 cash and inventories $8,000 on credit. 3 march borrowed $5,000 from a relative and deposited it in the bank. 4 march bought a motor car for $7,000 cash and withdrew $ 200 in cash for his own use. 5 march a further motor car costing $ 9,000 was bought. The motor car bought on 4 March was given in part exchange at a value of $ 6,500. The balance of purchase price for the new car was paid in cash. 6 March Conday won $2,000 in a lottery and paid the amount into the business bank account. He also repaid $1,000 of the borrowings. Based on the given information, prepare a statement of financial position for the business at the end of each day.

Answer the problem in detail with conclusions and results. submit your answer in a Microsoft Excel file, showing step-by-step calculations.

Explanation / Answer

The sheet is as show below:

Note: the $8000 he bough inventories is not considered as they were on credit and there was no cash flow

The Car was bought on exchange and the of 6,500 and only the reaminder 7,000 - 6,500 = 500 ws paid in cash

Date Description Deposit Withdrawal Balance 01-Mar New A/c 20000 20000 02-Mar Fixtures and Fittings 6000 14000 03-Mar Loan availed 5000 19000 04-Mar Motor Car 500 18500 04-Mar Cash Withdrawn 200 18300 05-Mar Further Motor Car 9000 9300 06-Mar Lottery Won 2000 11300 06-Mar Repaid borrwoing 1000 10300

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