New Zealand Help in solve this question..

[randip123]

Hi all,

I am new to accounting subject and need you help to solve the following exercise question:

Bill has decided to open a business and he began operations on 01/09/2012. The following transactions occurred during the first month of business:

- Bill opened a business cheque account and deposited $60000.
- He paid rent of $800 for the first month.
- He paid cash for equipment costing $11200.
- He purchased inventory on credit for $6800.
- He bought 2 weeks of adverting on local radio station for $1600 beginning on 15/09/2012.
- He deposited $5500 from cash sales into business cheque account. The goods has cost $2000.
- He paid insurance expense of $240 for september.
- Credit sales for september were $1400 of which $700 had been collected. The goods sold cost $600.
- Bill took inventory worth $500 for personal expenses.
- He purchased a van for $16000 cash to be used for business purpose only.


1) Use accounting equation to calculate the account balances on 30/09/2012.
2) calculate the change in equity from 01/09/2012 to 30/09/2012.
3) Prepare a statement of Financial Position as on 30/09/2012.


Thanks in advance.
Randip

 

[Nora]

The accounting equation is:
Assets = liabilities + Owners' Equity

What was the effect of the above transactions on this equation? At the start, the equation was as follows:
Assets = liabilities + Equity
$60000 = 0 + $60000

How did each part of the equation change over the month? (hint, continue the change for each transaction. for example, the second transaction's effect on the equation will be:
Assets = Liabilities + Equity
$60000 - 800 = 0 + 60000 - 800