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:

Duress

Compulsion, force, or pressure to perform an act or make a decision against one's will.

Transfer

The act of moving or conveying property, title, or rights from one entity or person to another.

Negotiable Instrument

A document in writing that ensures the payment of a certain sum of money, either when requested or at a predetermined date, with the document explicitly naming the individual responsible for payment.

Holder in Due Course

A party who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defects in the instrument and previous parties.