Question

QUESTION 2 ACCOUNTING EQUATION; DEBTORS CONTROL (20 MARKS)2.1 REQUIRED

■ Show the effect of the following transactions of Suncoast Repairs on the Accounting equation.Use “+” to denote an increase, “−” to denote a decrease and “0” to denote no change to theelements of the equation. Follow the example given.

■ Assume that the bank balance is favourable at all times.

Example: Paid for electricity by cheque, R1 000.

TRANSACTIONS

1. 2.1.1 Issued a cheque to Makro for the purchase of equipment, R20 000.

2. 2.1.2 Bought consumable items on credit from Metro, R300.

(10)

No.	Assets	=	Equity	+	Liabilities
e.g.	−R1 000		−R1 000		0

3. 2.1.3 Received a cheque for R800 from a debtor in settlement of his debt.

4. 2.1.4 Purchased a computer on credit, R10 000.

5. 2.1.5 The proprietor increased her capital contribution by depositing R50 000 into the banking

   account of Suncoast Repairs.

6. 2.1.6 Received R8 000 cash from customers for services rendered.

7. 2.1.7 The insurance premium was paid by debit order, R1 500.

8. 2.1.8 The proprietor used a business cheque to pay her telephone account, R900.

9. 2.1.9 Paid the account of a creditor, R4 000.

10. 2.1.10 Services rendered to customers on credit, R3 000.

Answer 1

= Equity thablling + 6 + 300 - 0 asets +yo, ooo + 300 + 800 +10,000 It soooo + 8000 - 1500 - 90o - 4001 t3000 + + = f 5000 10,000 0 DO9Douage = = - - 0 + 0. 5oo (90o) t o 0 + 64000 3000 + 0