Brad Pitt is the owner of The Olive Farm, a small business that manufactures and sells organic olives. Brad also manages the business on a part-time basis, sharing responsibilities with his employees. Using the business credit card by accident, Brad recently purchased a computer for his beautiful wife Olivia as a birthday present. Olivia is a sales representative for a large computer company and will be using the computer in her job. Based on the credit card statement, the accountant recorded the transaction in the accounts of The Olive Farm as follows: Office equipment Cash (Purchase of computer) Plant and equipment 5 000 One day later, Brad realised his error and decided to purchase some olive picking equipment worth $5000 out of his personal account to correct his error. Not realising the transactions were linked, the accountant recorded the transaction in the accounts as follows: Owner's capital-Brad Pitt (Capital contribution by owner-purchase of equipment for business by Brad Pitt from personal funds) 5 000 5 000 5 000 Required (a) For each of the transactions recorded above: (i) Determine if they have been recorded correctly or incorrectly based on the assumptions, concepts and principles that underlie the recording of accounting transactions. (ii) If any transactions have been recorded incorrectly, discuss how the accounting concept(s) or principle(s) have been breached. (iii) If any transactions have been recorded incorrectly, prepare BOTH the correcting entry to correct the recorded error as well as the correct journal entry that should have been recorded by the accountant in the first instance. Ignore GST.

Brad Pitt is the owner of The Olive Farm, a small business that manufactures and sells organic olives. Brad also manages the business on a part-time basis, sharing responsibilities with his employees. Using the business credit card by accident, Brad recently purchased a computer for his beautiful wife Olivia as a birthday present. Olivia is a sales representative for a large computer company and will be using the computer in her job. Based on the credit card statement, the accountant recorded (ii) breached. (iii) If any transactions have been recorded incorrectly, prepare BOTH the correcting entry to correct the recorded error as well as the correct journal entry that should have been recorded by the accountant in the first instance. Ignore GST. Brad Pitt is the owner of The Olive Farm, a small business that manufactures and sells organic olives. Brad also manages the business on a part-time basis, sharing responsibilities with his employees. Using the business credit card by accident, Brad recently purchased a computer for his beautiful wife Olivia as a birthday present. Olivia is a sales representative for a large computer company and will be using the computer in her job. Based on the credit card statement, the accountant recorded (ii) breached. (iii) If any transactions have been recorded incorrectly, prepare BOTH the correcting entry to correct the recorded error as well as the correct journal entry that should have been recorded by the accountant in the first instance. Ignore GST