Question 2

QUESTION TWO [20] F Heat started a business on 1 March 2019 to install air conditioners on the basis that the client will buy the air-conditioner through Heat and pay for it before it is installed. Assume that the bank account balance was R4 500 at 1 July 2019. The following transactions took place during July 2019 for Heat's Air Conditioners: REGENT BUSINESS SCHOOL (RBS) - JANUARY 2020 BACHELOR OF COMMERCE LAW YEAR 1 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE No. Transactions 1. Heat deposited R50 000 into the business account as additional capital. The business purchased a bakkie from Slick Vehicles for R88 000. Heat paid R18 000 immediately and arranged to pay the balance in 20 equal monthly instalments. The first instalment will be paid on 31 July 2019. Heat installed an air conditioner for a client and received R10 000 by EFT. New air conditioners were purchased for R20 000. The supplier, Aircool, issued an invoice to be paid in 45 days. (Periodic inventory system was in use). Invoiced a client R105 000 for the installation of 10 air conditioners. The client paid R90 000 into the bank. The balance will be paid in August. 6 Charged R900 on the overdue account of debtor, D Banda. An amount of R2 000 was written off as depreciation on the bakkie. 8 An amount of R34 200 was paid for wages. 9 Paid electricity R5 500 (R4 000 was for business use; R1 500 for personal use). 10 The first instalment was paid to Slick Vehicles. (refer no. 2 above) Required: 2.1 Process the above transactions through the basic accounting equation that must be set out in the following format. (NB: Totals for columns are NOT required) No ASSETS EQUITY LIABILITIES Non- Income Non- current Current Capital Expenses current Current (11) 2.2 (22/2) Prepare only the general ledger "Bank Account" in "T" format properly balanced. Show the number of the transaction, the contra account in the details column and value in the money column