Mr T Moleleng runs a small stationery business, Day Traders. The entity is not registered as a VAT vendor and uses a perpetual (continuous) inventory control system. (When using the perpetual inventory system all inventory purchased is recorded in the inventory account and when it is sold the cost price of the inventory is recorded in the cost of sales account and the inventory account. You will learn more about the topic in learning unit 6 and 7.) A mark-up percentage of 20% on cost is applicable. The following transactions by Day Traders took place during January 2022:

January

4 Purchased stationery for resale from Large Wholesalers, on credit R5 000. (Download: Click here for an explanation of transaction)

10 Paid the carriage on purchases for the stationery purchased on 4 January 2022, with an electronic funds transfer R62. (Download: Click here for an explanation of the transaction)

12 Purchased stationery (receipt books) to be used by the entity and paid with an electronic funds transfer R120. (Download: Click here for an explanation of the transaction)

14a Cash sales of merchandise R2 040. (Download: Click here for an explanation of the transaction)

14b The cost of sales for the merchandise sold is R1 700.

15 Paid Day Traders telephone account with an electronic funds transfer R250. (Download: Click here for an explanation of the transaction)

Prepare a table similar to the format below. Analyse the above transactions by indicating which account must be debited and which account must be credited in the general ledger. Also indicate the effect of each transaction on the accounting equation by using a + sign to indicate an increase and a - sign to indicate a decrease. Where applicable, assume that the bank balance is positive.