QUESTION 2: (30)

Consider the transactions below pertaining to Pandus Law Firm and prepare the following accounting statements from the transactions presented and answer the question:

2.1 Trial Balance (20) (Please list the different accounts in the Trial Balance in the following order: Assets, Labilities then Owners equity accounts)

2.2 Income Statement (7)

2.3 What is the value of the Total Assets, Total Liabilities and Total Owners Equity?

(3)

Transactions: Pandus Law Firm

1. Pandu deposits N$ 700 000 into the bank to start his own law firm business.

2. He purchases computers for the office in the amount of N$15000 by EFT.

3. He Withdraws N$20 000 from his bank account for petty cash.

4. Pandu pays office rental in the amount of N65 000 by EFT.

5. He purchases office furniture in the amount of N$25 000 by EFT.

6. He pays for coffee and tea in the amount of N$400 from petty cash.

7. He pays for the water and electricity in the amount of N$3000 by EFT.

8. He also purchases a law library from Lexis Nexis on credit worth N$25 000.

9. Pandu receives rent income for renting out one of his offices in the amount of N$7000 in cash.

10. Pandu takes an overdraft at Bank Windhoek in the amount of N$6000.

11. He withdraws N$1000 from the bank for his own private use.

12. Pandu renders divorce legal services to client James and charges/invoices the client in the amount of N$5000.

13. Client James pays Pandu for his divorce case in the amount of N$5000 (in respect of the invoice issued) by EFT.

14. Susan pays Pandu a deposit of N$50 000 to defend her on a criminal charge of robbery.

15. Pandu takes out a loan in respect of the business, with Standard bank, in the amount of N$300 000. The money is released into his bank account.