Recording transactions I Dick Dewy decides to start a road haulage business. He forms a company, Greenwood Transport Company, on 1 June year 1. Set out below are the transactions the company enters into in its first week of operations.

1 Dewy and associates invest 40,000 of cash in the company on 1 June.

2 The company buys a truck for 20,000 in cash on 2 June.

3 The same day it purchases with cash one year’s insurance on the vehicle for 1,200.

4 On 5 June, it rents an office for three months and pays in cash 1,500 to the landlord.

5 It purchases on credit office equipment costing 600 and supplies costing 200 on 6 June.

6 The following day it returns faulty office equipment costing 100 to a supplier for full credit.

7 On 8 June, it pays to suppliers 500 of the 700 balance outstanding.

8 That same day, it invests, in short-term interest-bearing securities, 5,000 of cash which is surplus to its immediate operating needs.

Required

(a) Record the above transactions on a worksheet similar to that in Exhibits 2.1 and 2.2.

(b) Draw up a balance sheet for Greenwood Transport Company at the close of 8 June year 1.

Check figures:

Total assets at 8/6 40,200 Cash at 8/6 11,800 AppenedixLO1