Golf player Darlene and Manuel Torezo have opened golf training field in May 2020 by

investing 40,000 EUR into their business. Following transactions occurred in May 2020:

1. A small buffet has been built for 20,000 EUR, paid in cash.

2. Purchase of golf equipment for 1,200 EUR on account.

3. Rent of golf field for 2,000 EUR / month has been signed and rent payment for the first

month has been already made.

4. Advertising cost 3,000 EUR out of which 1,000 EUR has not been paid yet.

5. Wages 600 EUR which will be paid the next month.

6. Revenues for May 2020 are 30,000 EUR and whole amount has been placed into

company bank account.

7. Bank account withdrawal of 1,800 EUR.

8. Utility cost 300 EUR not paid yet.

Tasks:

a) How much net income / net loss has the company made per accrual basis in accounting

and cash basis in accounting?

b) Based on result of accrual basis, can company owners consider the first month a success

or not?

c) Fill in the accounting equation table below and calculate ending balance.

d) How much are company assets (total)?

e) How much equity does the company have?