QUESTION ONE [20]

Detail the impact of the following transactions on the accounting equation, by populating the table provided. Document all calculations. Example:

Purchase stationery of R50 from petty cash. Account debit Account credit Asset Equity Liability Stationery Petty cash (R50) (R50)

1. A rental agreement, effective 1 April 2021, stipulates that the rental expense of R4 500 increases annually with 8% on 1 April. At financial year-end, 31 March 2023, the rental balance reported in the general ledger amounted to R63 568.80 (3)

2. A motor vehicle, originally purchased for R320 000 on 1 December 2020, is depreciated at 20% on the diminishing depreciation method. The residual value was set at 25% of the purchase price. The vehicle was sold on 30 June 2023 for R275 000. Only record entries for the financial period 1 April 2023 to 30 June 2023. (9)

3. Mr. Gizzis account of R7 430 was handed over to the attorneys for collection during May 2022. The lawyers finalized the liquidation and distributed a final payout of 45c in the rand on 31 March 2023. The customer control account amounted to R55 700 prior distribution. The company adopted a policy to allow for a provision of doubtful debts of 12%. The allowance account had a balance of R 4 600 on 28 February 2023. The entries affecting March 2023 have not been recorded. (8)