Solutions

Exercise 1.1

(a) The Balance Sheet was prepared as at 1/1/2001

(b) The owner equity is $6000

(c) The owner has withdrawn $500.

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Exercise 1.2

D Webber's Investment in her business is $8000

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Exercise 1.3

Assets = Liabilities + Owner's Equity

$15000 = $1250 + $13750

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Exercise 1.4

The value of the Assets is $12000

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Exercise 1.5

Samuel Smith is worth $62500.

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Exercise 1.6

(a) Bought office equipment for $400 cash.

(b) Drew $200 for personal use.

(c) Paid $200 off loan.

(d) Bought a $2000 motor vehicle on credit from Zippy Car Sales

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Exercise 1.7

(a) The balance of the account is $25 debit.

(b) The balance of the account is $4935 credit.

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Exercise 2.1

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Exercises 2.2 The balanced Trial Balance appears below.

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Exercise 2.3

T Picket's accounts are as follows

T Picket's Trial Balance is

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Exercise 2.4

Addie's Bazaar accounts are as follows

Addie's Bazaar Trial Balance is

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Exercise 3.1

Cost of goods sold = Opening Stock + Purchases - Closing Stock

Cost of goods sold = $1450+ $3450 - $1500 = $3400

Gross Profit = Sales - Cost of goods sold

Gross Profit = $5500 - $3400 = $2100

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Exercise 4.1

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Exercise 4.2

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Exercise 4.3

In this question we calculated the Owners Equity, Capital a/c, by doing a Trial Balance and making the Capital the balancing figure.

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