EXERCISE 1.4 1.4 H. Hoffer had worked for a number of years for a motor transport company. He resigned from the company at the end of 2014 and established his own business, Hoffer's Haulage, which commenced operations on 1 January 2015. Hoffer contributed the following for use in his business: 1 Five-ton diesel truck which he had previously bought for R8 400. R2 000 of his personal savings which he deposited in a newly opened business banking account. His firm's transactions for the month of January were: January 2 Borrowed R4 000 from an oil company to establish a service station and banked this sum. The loan is for a five-year period and interest is payable at 6% per annum. (Ignore interest). 6 Bought an articulated trailer for R3 600 on credit. The amount owing is payable over a period of 12 months. 9 Paid the monthly instalment of R200 owing on the trailer. 29 Billed clients for amounts owing for transport fees R3 000. 30 Paid the month's rent, fuel, interest and wages expenses of R900. 31 Hoffer withdrew R600 from the bank for personal living expenses. 31 Hoffer estimated that depreciation on the truck and trailer for the month was R200. Hoffer estimates that his truck and trailer have estimated useful lives of 5 years. REQUIRED: A. (a) Record the transactions of Hoffer's business on the attached schedule. (b) Prepare the Statement of Profit or Loss for January 2015. (c) Prepare the Statement of Financial Position at 31 January 2015. B. (a) Record the transactions of Hoffer's business using ledger accounts. (Do not use expanded ledger.) (i) Use the account titles given on the schedule. (ii) Subdivide each page to accommodate only three account titles. (b) Prepare a trial balance at the end of January. (c) Balance the ledger accounts. Page 1 of 2 1.4 AS SETS LIABILITIES CAPITAL MOTOR VEHICLES ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE CAPITAL H. HOFFER BANK LOAN January 1 2 6 9 29 30 31 31 Page 2 of 2