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Sofia after planning for several months she decided to start her own massage business called Tamu Spur in Nairobi, Kilimani area. During its first month
Sofia after planning for several months she decided to start her own massage business called Tamu Spur in Nairobi, Kilimani area. During its first month of operations September 2022, Tamu spur undertook the following transactions;
1/9: Sofia put Sh 200,000 of her savings into a bank account in the name of the business.
2/9: She bought supplies for Sh 30,000 cash.
3/9: She paid rent deposit of Sh 10,000 and Sh 10,000 rent for the month of September for operating space in Mato Apartments.
5/9:She furnished the space installing new furniture and fixtures sold to her on credit by a supplier at Services provided during the first week of business and the balance was for services provided during the two week period ended 30 September 2022.
30/9: Sofia paid the first installment on the furniture and fixtures, withdrew Sh 20,000 for her personal expenses, paid her assistant Sh 6,000 as wages for the second half month, received a bill from Kenya Power of Sh 1,500 for electricity consumed during the month of September and conducted a stock take of her supplies, only Sh 10,000 of the supplies were in stock as at September 30, 2022.
c) Prepare statement of changes in owner’s equity for Tamu Spur September 2022.
d) Prepare a statement of financial position as at September 30, 2022 for Tamu Spur.
1/9: Sofia put Sh 200,000 of her savings into a bank account in the name of the business.
2/9: She bought supplies for Sh 30,000 cash.
3/9: She paid rent deposit of Sh 10,000 and Sh 10,000 rent for the month of September for operating space in Mato Apartments.
5/9:She furnished the space installing new furniture and fixtures sold to her on credit by a supplier at Services provided during the first week of business and the balance was for services provided during the two week period ended 30 September 2022.
30/9: Sofia paid the first installment on the furniture and fixtures, withdrew Sh 20,000 for her personal expenses, paid her assistant Sh 6,000 as wages for the second half month, received a bill from Kenya Power of Sh 1,500 for electricity consumed during the month of September and conducted a stock take of her supplies, only Sh 10,000 of the supplies were in stock as at September 30, 2022.
Required;
a) Arrange the following asset, liability and owners equity account in an accounting equation;
- Cash,
- accounts receivable,
- supplies,
- furniture and fixtures,
- rent deposit,
- accounts payable,
- accrued expense and
- Sofia’s capital and
show by addition and subtraction the effects of each of the preceding transactions on the accounting equation. Provide an explanation column for the changes in equity.
b) Prepare the income statement for Tamu Spur for the month of September 2022.c) Prepare statement of changes in owner’s equity for Tamu Spur September 2022.
d) Prepare a statement of financial position as at September 30, 2022 for Tamu Spur.
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