QUESTION 1 [25] On 1 March 2018. Deep Breath, a fitness fanatic, set up a gym called Fitshape Gym to follow his passion to promote healthy living. The following were the transactions for month ended 31 March 2018: March 1. Transferred R80 000 from his personal savings account into Fitshape Gym's bank account. Also transferred gym equipment valued at R20 000 from his home gym to the business premises. Paid rent for March by cheque, R4 000; 5. Purchased additional equipment on credit from Muscle-up Equip for R54 000 This account is payable in three (3) equal monthly instalments that are payable at the end of March, April and May 2018. Deep Breath withdrew R1 500 from the bank account for personal use. 9 Made an electronic funds transfer (EFT) of R3 000 in favour of A Buddy to set up a web page and on-line advertisements. 2. 7. 30 Total gym fees for the month of R27 000 was deposited into the bank account. 31 Issued a Fitshape Gym: Accounting equation for the month ended 31 May 2017; EQUITY LIABILITIES Equip- Income/ 2017 Capital Expenses May R R R R R 21 -6000 ASSETS + Date Non- current ment Bank Current R 0 0 -6 000 0 0 (16) 1.2 With reference to the International Financial Reporting Standards (IFRS) and its Framework, provide the definition of assets. In respect of Fitshape Gym's equipment at 31 March 2018, briefly explain why you would choose to treat the equipment as either a non-current asset or a current-asset. (5) 1.3 Refer to the transaction on the 5 March 2018 above, and briefly explain whether the amount owing to Muscle-up Equip must be shown as a non- current liability or a current liability in the financial statements at 31 March 2018. (2) 1.4 Briefly describe what is generally accepted to be the purpose of financial accounting (2) [25]