Answer to Question #288770 in Accounting for aami

Question

Sarah has the following assets and liabilities on the 1st of February 2021

Accounts payable-$7,000 Accounts receivable-$6,000

Machinery-$60,000 Cash at bank-$29,000

Motor vehicle-$65,000 Cash in hand-$3,000

Inventory-$10,000 Capital-$166,000

On 2nd February 2021 the following transactions took place

1) Purchased goods $2000 by cash.

2) Paid the creditors $700 by cheque.

You are required to prepare the statement of financial position of Sarah using the vertical format on the 2nd of February 2021,after the above transactions have taken place.

Answer 1

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