A summarised balance sheet for Roche Ltd at 31 August 2019 was as follows: 

The following transactions occurred during September: 

a. Paid $100 000 of accounts payable. 

b. Received $300 000 from accounts receivable. 

c. Purchased inventory on credit for $200 000. 

d. Made credit sales of $700 000 (COGS was $450 000). 

e. Administrative expenses of $30 000 were paid in cash. 

f. Depreciation of $10 000 was recognised. 

g. Prepayments of $10 000 expired during the month. 

h. Dividends of $20 000 were declared and paid. 

i. Paid back $100 000 on the loan. 

j. Issued additional shares worth $500 000. 

k. Paid the wages bill of $50 000.

Required: 

1. Show the effect of the above transactions on the accounting equation using a transaction analysis table. 

2. Prepare journal entries for each transaction and determine the balances of the accounts. 

3. What is the effect on net profit and total assets? Write ‘increase’, ‘decrease’ or ‘no effect’ for each transaction and include dollar amounts.

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Assets Cash Accounts receivable Inventory Prepayments Equipment Accumulated depreciation $ 110 000 410 000 610 000 80 000 610 000 (140 000) 1 680 000 Liabilities and shareholders' equity Accounts payable Long-term loan Share capital Retained profits s 210 000 310 000 910 000 250 000 1.680 000