ASSIGNMENT 01 QUESTION 1 Lethabo Flower started her own baby clothing company, F
ID: 2539653 • Letter: A
Question
ASSIGNMENT 01 QUESTION 1 Lethabo Flower started her own baby clothing company, Flower Power Entity. Flower Power Entity has a 31 December year end. Flower Power Entity uses a perpetual inventory system. The following transactions occurred during the reporting period of 31 December 2017: (38 MARKS) The opening balance of Bank on 01 January was N$250 000. Flower Power entered into a contract on 25 March 2017 with ABC Entity to purchase a sewing machine for N$15 000 on credit The sewing machine was delivered to Flower Power on 01 April. Flower Power settled the payable to ABC Entity of N$15 000 for the sewing machine on 30 April. On 30 April Flower Power entered into a contract with XYZ Motors to purchase a delivery vehicle for N$180 000. The vehicle was registered in the name of Flower Power on 10 May and delivered on 15 June 1. 2. 3. 4.Explanation / Answer
A=OE+L
A=Asset
OE=Owners Equity
L=Liability
Nr
ACCOUND DEBITED
ACCOUNT CREDITED
A
OE
L
1
Opening balance (No journal entry required)
2
Asset-Sewing maching
Accounts payable
+15,000
+15,000
3
Accounts payable
Bank
-15,000
-15,000
4
Asset-Vehicle
Accounts payable
+180,000
+180,000
4
Accounts payable
Bank
-180000
-180000
5
Insurance expense
Bank
- 1,800
-1,800
6
(No journal entry is required for contract termination)
7
Repair expenses
Bank
- 2,500
-2,500
8
Inventory
Accounts payable
+30,000
+30,000
9
Accounts payable
Bank
- 30,000
-30,000
10
Account receivable
Sales
+ 50,000
+50,000
10
Cost of goods sold
Inventory
-25,000
-25,000
11
Withdrawal
Cash
-10,000
-10,000
Nr
BANK ACCOUNT
Debit
Credit
1
Opening balance
250,000
3
Accounts payable
15,000
4
Asset-vehicle
180,000
5
Insurance expense
1,800
7
Repair expense
2,500
9
Accounts payable
30,000
11
Withdrawal
10,000
Closing balance c/f
10,700
Total
250,000
250,000
Balance b/d
10,700
Nr
ACCOUND DEBITED
ACCOUNT CREDITED
A
OE
L
1
Opening balance (No journal entry required)
2
Asset-Sewing maching
Accounts payable
+15,000
+15,000
3
Accounts payable
Bank
-15,000
-15,000
4
Asset-Vehicle
Accounts payable
+180,000
+180,000
4
Accounts payable
Bank
-180000
-180000
5
Insurance expense
Bank
- 1,800
-1,800
6
(No journal entry is required for contract termination)
7
Repair expenses
Bank
- 2,500
-2,500
8
Inventory
Accounts payable
+30,000
+30,000
9
Accounts payable
Bank
- 30,000
-30,000
10
Account receivable
Sales
+ 50,000
+50,000
10
Cost of goods sold
Inventory
-25,000
-25,000
11
Withdrawal
Cash
-10,000
-10,000