Craig Smith purchased a retail sports clothing business on 1 April.He purchased the business for $160,000.The assets and liabilities taken over were as follows:
The following transactions (events)took place during the month of April:
• Craig invested $10,000 cash into the business.
• He purchased stock for $7,500 on credit from I Supply Ltd.
• Paid rent $900 and advertising $1,200.
• Sold inventory for $3,900 on credit (cost price was $1,350).
• Purchased a business motor vehicle for $25,000,paying a $2,500 deposit and agreeing to pay the balance over 24 months under a hire purchase agreement with A Finance Co.
• Paid wages to staff $500 and paid Craig's personal household expenses of $400.
• Sold inventory receiving cash $2,200 (cost price $750).
• A customer returned goods purchased on credit for $360 (cost price was $150).
• Craig took sports clothing for personal use (cost price $250).
• Received $1,000 from a customer paying off her account.She had deducted $50 discount before making this payment.
• Equipment was sold for $250,on credit.This had originally cost $400.
Show the effect of the opening assets and liabilities taken over,and the remaining transactions (events)on the accounting equation.

Question

Craig Smith purchased a retail sports clothing business on 1 April.He purchased the business for $160,000.The assets and liabilities taken over were as follows:
  The following transactions (events)took place during the month of April:
• Craig invested $10,000 cash into the business.
• He purchased stock for $7,500 on credit from I Supply Ltd.
• Paid rent $900 and advertising $1,200.
• Sold inventory for $3,900 on credit (cost price was $1,350).
• Purchased a business motor vehicle for $25,000,paying a $2,500 deposit and agreeing to pay the balance over 24 months under a hire purchase agreement with A Finance Co.
• Paid wages to staff $500 and paid Craig's personal household expenses of $400.
• Sold inventory receiving cash $2,200 (cost price $750).
• A customer returned goods purchased on credit for $360 (cost price was $150).
• Craig took sports clothing for personal use (cost price $250).
• Received $1,000 from a customer paying off her account.She had deducted $50 discount before making this payment.
• Equipment was sold for $250,on credit.This had originally cost $400.
Show the effect of the opening assets and liabilities taken over,and the remaining transactions (events)on the accounting equation.

Quizplus · Accepted Answer

The Answer of Craig Smith purchased a retail sports clothing business on 1 April.He purchased the business for $160,000.The assets and liabilities taken over were as follows:
  The following transactions (events)took place during the month of April:
• Craig invested $10,000 cash into the business.
• He purchased stock for $7,500 on credit from I Supply Ltd.
• Paid rent $900 and advertising $1,200.
• Sold inventory for $3,900 on credit (cost price was $1,350).
• Purchased a business motor vehicle for $25,000,paying a $2,500 deposit and agreeing to pay the balance over 24 months under a hire purchase agreement with A Finance Co.
• Paid wages to staff $500 and paid Craig's personal household expenses of $400.
• Sold inventory receiving cash $2,200 (cost price $750).
• A customer returned goods purchased on credit for $360 (cost price was $150).
• Craig took sports clothing for personal use (cost price $250).
• Received $1,000 from a customer paying off her account.She had deducted $50 discount before making this payment.
• Equipment was sold for $250,on credit.This had originally cost $400.
Show the effect of the opening assets and liabilities taken over,and the remaining transactions (events)on the accounting equation.

Craig Smith Purchased a Retail Sports Clothing Business on 1