You Are Provided with the Statement of Financial Position at the Beginning

question 8

Essay

You are provided with the statement of financial position at the beginning of the period for a firm of accountants.You are also given four of the transactions that have occurred during the period.
REQUIRED:
a)Complete the table to show how each transaction affects the accounts shown.
b)Calculate the figures in the final column of the table from which the statement of financial position at the end of the period can be prepared.
$\begin{array}{|l|l|l|l|l|l|l|}\hline &\text { Beginning balance}&\text { Transaction }1&\text { Transaction }2&\text { Transaction }3&\text { Transaction }4&\text { Ending balance}\\&\text { Sheet }&&&&&\text { Sheet }\\\hline \text { Assets } & \\\$ & \$& \$& \$& \$& \$ \\\hline \text { Cash } & 10,000 \\\hline \text { accounts } & \\\text { receivable } & 5,500 \\\hline \text { Plant \& } & \\\text { Equip } & \underline{50,000} \\\hline &65,000\\\hline \text { Liabilities } & \\\hline \text { accounts } & \\\text { payable } & 6,000 \\\hline \text { Equity } & \underline{59,500} \\\hline & 65,500 \\\hline \end{array}$
Transactions for the period:
1.Collected $3,000 from debtors
2.Paid accounts payable $6,000
3.Owner paid in additional capital contribution of $10,000
4.Purchased on credit $2,000 of additional plant.

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Definitions:

Surplus

An excess of supply over demand in a market, leading to downward pressure on prices.

Equilibrium Level

Refers to the state in a market where supply equals demand, leading to a stable price for a product or service.

Substitute Good

A product or service that can be used in place of another to satisfy similar needs or desires.

Equilibrium Price

The price at which the quantity of a product offered by sellers equals the quantity of the product that buyers are willing to purchase, without any surplus or shortage in the market.