Borrowed $28,000 cash from the NAB, which was used to purchase another van. The Loan is to be repaid in monthly instalments of $1,000, commencing in May 2015.
Van (asset) will increase by $28,000
loan(liability) will increase by $28,000
are these correct?
Question 2
As at 30 september, assets + liabilities of sam's shop
assets
debtors = 3000
fixtures + fittings = 15000
stock = 25000
fridges = 40000
equities
bank overdraft = 2500
creditors = 7000
loan ( repayable $6000 p.a) = $36000
capital = $37500
In the first week of October 2015, the following occured
october 1. Paid $2000 to creditor
2. sam contributed $5000 of his own money to the business
3. paid $3000 off the loan principal
4. purchased stock on credit for $10000
5. sam took $2500 of the fixtures and fittings home for personal use
6. paid $1200 in advance for the next 6 months
Can someone please explain how to do a balance sheet with all this information? (question 2)
Thanks
Hey!
Usually for these type of questions, you can either draw up a T ledger, or do each individual transaction, recording the effect on either side of the balance sheet; as I will.
1) Paid a creditor: Bank; down $2000, Creditors Control; down $2000
2) Capital Contribution: Bank; increase $5000, Capital; increase $5000
3) Paid off loan principle: Bank; down $3000, Loan; down $3000
4) Paid stock on credit: Stock Control; increase $10000, GST Clearing (asset); increase $1000, Creditors Control; increase $11000. -I'm assuming you didn't include GST, and assuming the GST balance will become a current asset.
5) Withdrawal of fixtures and fittings: Fixtures and Fittings; down $2500, Drawings (Negative Owner's Equity); increase $2500 (overall decrease by $2500 in Capital).
6) Paid $1200 in advance (for the purposes of this, I will assume it's rent): Prepaid Rent Expense; increase $1200, GST Clearing (asset); increase $120, Bank; decrease $1320.
Overall Effect on the Balance SheetCurrent Assets: Current Liabilities:Stock Control; $35000 Bank Overdraft; $3820
Debtors Control; $3000 Creditors Control; $16000
GST Clearing; $1120 Loan; $6000 $25820
Prepaid (Rent) Expense; $1200 $40320
Non-Current LiabilitiesNon-Current Assets Loan; $27000 $27000
Fixtures and Fittings; $12500
Fridges; $40000 $52500
Owner's Equity Capital; $42500
less Drawings; $2500 $40000
Total Assets: $92820 Total Equities: $92820Hope this helped! Let me know if you have any questions.