Chapter2Q - Financial accounting for decision makers (5th...

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Unformatted text preview: Financial accounting for decision makers (5th edition) Atrill and McLaney Exercise Chapter 2 Sarah started a new business on 1 June. During the first month of her business the fo llo wing transact ions took place: a Sarah opened a bank account in the name of her business and transferred £50,000 of her own money to it. b She borrowed £35,000 from the Commercial Loan Company and paid the money into the business bank account. c She paid £40,000 for a small business unit (premises). d She paid £3,000 for a second­hand delivery van. e She bought goods for resale ( inventories) for £10,000, paying immediately, and further goods for £20,000, on credit. f She so ld goods, which had cost £15,000, for £25,000. £5,000 of this revenue was for cash and the remaining £20,000 was on credit. g She paid staff wages for June totalling £500. h She paid £100 for petrol for the van, all o f which was used dur ing June. i She received £4,000 from trade receivables. j She paid £200 to the Commercial Loan Co mpany as interest on the loan for the mo nth. Required: Open a balance sheet for Sarah’s business and show each of these transactions on it as a series of pluses and minuses to reach the posit io n of the business as at the end of June. Ignore depreciation o f the non­current assets. ...
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