You are given the following simplified statement of financial position of the Whiting Company as at 31 August year 6:

a The following transactions took place in September year 6.
Show how each would affect the statement of financial position.
(Each transaction must affect two figures, and the statement of financial position must continue to balance.)
i A new machine costing £10,000 was purchased and paid for in cash.
ii Inventories, which had cost £50,000, were sold to Mrs Fish for £90,000 and paid for immediately in cash.
iii £30,000 was received from debtors, which were shown as ‘receivables’ on the statement of financial position.
b Show how the statement of financial position would appear after these transactions have been recorded.

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Non-current assets 350,000 Current assets Inventories (at cost) 90,000 Trade receivables 80,000 Cash 30,000 200,000 Total assets 550,000 Current liabilities Trade payables Equity 130,000 Share capital 380,000 Retained earnings 40,000 420,000 Total equity and liabilities 550,000