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

question 14

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.
$\begin{array}{|r|r|r|r|r|r|r|}\hline &\text { Beginning } & \text { Transaction } & \text { Transaction } & \text { Transaction } & \text { Transaction } & \text { Ending } \\&\text { Balance } & 1 & 2 & 3 & 4 & \text { Balance }\\&\text { Sheet }&&&&&\text { Sheet }\\\hline \text { Assets } & \$ & \$ & \$ & \$& \$& \$ \\\hline \text { Cash } & 10000 & & & \\\hline \text { accounts } & \\\text { receivable } & 5500 \\\hline \text { Plant \& } & \\\text { Equip } & \underline{50000} \\\hline&65,000\\\hline \text { Liabilities } & \\\hline \text { accounts } & \\\text { payable } & 6000 \\\hline \text { Equity } & \underline{59500} \\\hline & \underline{65500}\\\hline\end{array}$ 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:

Equipment

Tangible property other than land or buildings that is used in operations, such as machinery, computers, vehicles, and furniture.

Cost of Goods Sold

The outlays directly connected to the making of goods a company markets, comprising both material and labor expenses.

Net Income

The remaining income of a company after subtracting all costs and taxes from its total income.

Inventory

A collection of goods or materials a company holds for sale or production.