Mrs. Meldon started a Kids Apparel business as a sole proprietor under the brand name of Hopscotch. Consider the following transactions during the 1st month of her business.

1. On 1st March, she invested a capital of USD 7500 in the business.

2. On 2nd March, she withdraws $100 of cash from the business for her personal use.

3. On 3rd March, she purchased an office/building for USD 2500 cash for business use.

4. On 5th March, she purchased furniture for USD 750 cash for business use.

5. On 6th March, she purchased inventory of ready suits from her tailor for USD1500 on cash.

6. On 9th March, she sold kids clothes to the customer for USD 500 cash, the cost of those suits was USD 350.

7. On 12th March, she further purchased inventory of ready suits for USD 1000 on credit.

8. On 15th March, she sold kids suits to the customer for USD400 on credit, the cost of those suits was USD275.

9. On 18th March, she paid USD 500 cash to her payables.

10. On 20th March, she collected USD400 cash from the receivables.

11. On 28th March, she paid USD 75 cash for utility bills.

12. On 31st March, she borrowed money from bank of amount USD 2500 for business purpose.

Possible Account Titles

• Cash
• Capital
• Building
• Furniture
• Inventory
• Accounts payable
• Accounts receivable
• Notes payable

Required:

1. Show how each of the above transactions impacts the accounting equation of Mrs. Meldons business, Hopscotch using journal ledger entries. (Follow the pattern that we discussed during the lecture)
2. Prepare the final balance sheet and income statement for Mrs. Meldons business for the month of March.
3. Expand the basic accounting equation for a sole proprietor business to show the various equity components (if applicable).