BUS1DAS Practice Exam 2 Case Study 1: The table below is NOT assessed though you may wish to use them to prepare your answers to questions 1 –5. 1. What accounting entries were made in relation to transaction 4? Trans Cash Stock A/R PPE Assets Payables Debt Liabilities Capital Retained Earnings 1 2 3 4 5 Interest Depr Tax TOTAL FACTS SET The following transactions occurred during a financial year. Use this information to answer questions 1 to 5. Transaction 1:The owner invested $20,000 into the business. Transaction 2:The business borrowed $30,000 from the bank at 3% p.a. interest, with one interest payment due this year. Transaction 3:The business paid an advertising firm $2,000 cash for their services. Transaction 4:Business purchases $8,000 of stock, 60% in cash and 40% on deferred payment terms. Transaction 5:Using half of the stock, the business sells $10,000 worth of goods. Customers pay 80% in cash, and 20% on deferred payment terms. In preparing the financial accounts for the year, the business provided for the payment of Income Tax at a rate of 30%, though it will not be paid until the following year. It should be recorded under “Payables” on the Balance Sheet.The WORKSHEET may assist you in preparing your answers.