Answer to Question #232682 in Economics for nat

Question

■ Show the effect of the following transactions of Montagu Stores on the Accounting equation. Use

“+” to denote an increase, “–” to denote a decrease and “0” to denote no change to the elements of

the equation. Copy the table in your answer book and follow the example given.

■ Assume that the bank balance is favorable at all times. (10)

Transactions

2.1.1 Received rent from the tenant, R3 000.

2.1.2 Received an account from Telstar Motors for motor vehicle repairs, R2 000.

2.1.3 Issued a cheque to Makro Suppliers for equipment purchased, R10 000.

2.1.4 Issued a receipt to the proprietor who increased her capital contribution by R200 000.

2.1.5 Received R1 000 from a debtor who settled his account.

Answer 1

2.1.1 Income +3000

2.1.2 Accounts payable +2000

2.1.3 Bank account -10 000 equipment +10 000

2.1.4 equity +200 000 Bank account +200 000

2.1.5 account receivable -1 000 Bank account +1 000