2.4Arthur Moore commenced business on 1 October 20X2 by paying £50,000 into a newly opened business bank account. His transactions during the first three weeks of business were as follows:

2 Oct. Purchased furniture for cash £5,000.

4 Oct. Purchased goods for resale for cash £3,500.

7 Oct. Purchased goods for resale, on credit from H. Verity, for £12,000.

8 Oct. Purchased delivery vehicle, on credit from Ivan Karic, for £11,000.

10 Oct. Paid H. Verity £12,000.

11 Oct. Borrowed £5,500 from Laurent Fortune and made a first payment to Ivan Karic of £5,500.

14 Oct. Sold all the goods he bought on 4 October (purchase price £3,500) for cash

£6,000.

15 Oct. Paid wages to staff £900.

16 Oct. Sold half of the goods bought from H. Verity on 7 October, to N. Kay on credit for £9,000.

17 Oct. Arthur agreed to allow his cousin John Moore to join him in the business.

John brought £5,000 of his own money into the business, which is used to pay part of the amount owed to Karic.

18 Oct. Because of John Moore’s carelessness, a potential customer, Mr Lee, fell in Moore’s office and broke his arm. Lee threatened to sue the firm, so Arthur promised to pay Lee £3,000 for medical treatment.

21 Oct. Arthur felt that he wished to reduce his investment in the firm. He therefore sold half his interest in the firm to his uncle, Arthur Teak, for £25,000.

Using an analysis sheet, show how the assets, liabilities and equity are affected by each transaction, showing how the balance sheet would appear after each transaction.