On 1 March, Joe Conday started a new business. During March, he carried out the
ID: 2733682 • Letter: O
Question
On 1 March, Joe Conday started a new business. During March, he carried out the following transactions: 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.
Submission Requirements: Answer the problem in detail with conclusions and results.
Submit your answer in a Microsoft Excel file, showing step-by-step calculations.
Explanation / Answer
Joe Conday Balance sheet at March 1 Bank 20000 Capital 20000 Balance sheet at March 2 Bank 14000 Capital 20000 Furniture & Fixtures 6000 Creditors 8000 Stock 8000 28000 28000 Balance sheet at March 3 Bank 19000 Capital 20000 Furniture & Fixtures 6000 Creditors 8000 Stock 8000 Loan 5000 33000 33000 Balance sheet at March 4 Bank 11800 Capital 19800 Furniture & Fixtures 6000 Creditors 8000 Stock 8000 Loan 5000 Motor CAR 7000 32800 32800 Balance sheet at March 5 Bank 9300 Capital 19300 Furniture & Fixtures 6000 Creditors 8000 Stock 8000 Loan 5000 Motor CAR 9000 32300 32300 Balance sheet at March 6 Bank 10300 Capital 21300 Furniture & Fixtures 6000 Creditors 8000 Stock 8000 Loan 4000 Motor CAR 9000 33300 33300 (b) Joe Coday Balance Sheet as at 6th march Fixed Assets Furniture & Fittings 6000 Motor car 9000 15000 Current Assets Stock in trade 8000 Bank 10300 18300 Less : Current Liabilities Creditors 8000 10300 10300 25300 Less : Loans 4000 21300 Capital 21300
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