Exercise 2.6

Exercise 2.6: The owner of Prestige Paints has provided the following list of transactions in relation to her business: April 1 C. Barry (owner) banked $28 000 to commence a business account 2 3 4 5 6 7 8 Bought goods to sell in the shop for $12 000 cash Sold stock for $1 200 cash (cost price $700) Paid rent $500 Purchased stock on credit for $8 000 Sold stock for $1 900 cash (cost of sale $900) Paid creditor $2 000 of amount owing Borrowed $5 000 from EZ Finance a Prepare a worksheet to show the twofold effect of these transactions. Follow the format shown in figure 2.8 and use the following headings: Assets: Cash at bank, Stock Liabilities: Creditor, Loan Owner's equity: Capital b Prepare a statement of financial position as at 8 April 2005, taking into account al these trans- actions