Accounting 1 study guide On line solutions

Chapter 2 Recording transactions in a double entry system

Exercise 2.6.4 - Solution

Archi Tect for the month ended 28 February 2018

a) Detailed accounting equation for the month ended 28 February 2018.

Capital = (Value of assets) less (Value of liabilities)

= R19 300 less R7 500
= R11 800

date ASSETS Equity Liabilities

Equipment Bank Trade Capital Income / Current

receivab Expenses
8 000 9 100 2 200 11 800 nil 6 000 Amazing S
Bal.
1 500 Stationer C
2.2 ---- (2 500) ---- ---- (2 500) rent ----
5.2 ---- (2 000) ---- ---- ---- (2 000) AmazingS
10.2 7 000 ---- ---- ---- ---- 7 000 AmazingS
14.2 ---- 14 000 ---- ---- 14 000 Serv.fee
17.2 ---- ---- ---- ---- (3 500) stationer 3 500 Stationer C
21.2 ---- 2 200 (2 200) ---- ---- ----
23.2 ---- (4 000) ---- ---- ---- (4 000)StationerC
25.2 ---- (13 000) ---- ---- (13 000) Salaris ----
---- (3 900) ---- ---- (3 900) Elect. ----
---- (1 100) ---- ---- (1 100) Teleph. ----
28.2 ---- 17 500 ---- ---- 17 500 Serv Fee ----

15 000 16 300 Nil 11 800 7 500 12 000

R 31 300 R19 300 R12 000

2.6.4 b) Archi Tect

Page 1 of 7
 Accounting 1 study guide On line solutions

General journal entries for month ended 28 February 2018 (GJ3)

Date Detail Folio Debit - R Credit - R

1.2.201 Bank Dr A2 9 100
8 Trade receivables: Ginger Dr A3 2 200
Equipment Dr A1 8 000
Trade payables:
: Amazing solutions L1 6 000
: Stationers CC L1 1 500
Capital E1 11 800
Opening balance at 1.2.2018
2.2 Rent Dr Ex1 2 500
Bank A2 2 500
Paid rent for February 2018
5.2 Trade payables: Amazing sol Dr L1 2 000
Bank A2 2 000
Paid creditor on account
10.2 Equipment Dr A1 7 000
Trade payables: Amazing sol L1 7 000
Purchased equipment on credit
14.2 Bank Dr A2 14 000
Service Fees I1 14 000
Deposited income into bank a/c
17.2 Stationery Dr Ex2 3 500
Trade payables: Stationers CC L1 3 500
Purchased stationery on credit
21.2 Bank Dr A2 2 200
Trade receivables: Ginger A3 2 200
Received monies in settlement
23.2 Trade payables: Stationers Dr L1 4 000
Bank A2 4 000
Paid creditor on a/c

25.2 Salaries and wages Dr Ex3 13 000

Page 2 of 7
 Accounting 1 study guide On line solutions

Bank A2 13 000
Paid salaries and wages
25.2 Electricity Dr Ex4 3 900
Telephone Ex5 1 100
Bank A2 5 000
Paid electricity and telephone
28.2 Bank Dr A2 17 500
Service Fees A1 17 500
Banked service fees for February

________________________________________________________________

2.6.4 c) Archi Tect:

Ledger for month ended 28 February 2018

Dr Equipment (A1) Cr
1.2 Balance b/d 8 000 28.2 Balance c/d 15 000
10.2 T/payable: Amaz gj1 7 000
15 000 15 000
1.3 Balance b/d 15 000

Dr Bank Account (A2) Cr

1.2 Balance b/d 9 100 2.2 Rent c/d 2 500
14.2 Service fees gj1 14 000 5.2 T/payable: Amaz gj1 2 000
21.2 T/receivable: Gin gj1 2 200 23.2 T/payable:station gj1 4 000
28.2 Service fees gj1 17 500 25.2 Salaries & wages gj1 13 000
Electricity gj1 3 900
Telephone gj1 1 100
28.2 Balance c/d 16 300
42 800 42 800
1.3 Balance b/d 16 300

Dr Trade receivables (A3) Cr

Page 3 of 7
 Accounting 1 study guide On line solutions

1.2 Balance: Ginger b/d 2 200 21.2 Bank: Ginger gj1 2 200
2 200 2 200

Dr Capital (E1) Cr
1.2 Balance b/d 11 800

Dr Trade payables (L1) Cr

5.2 Bank: Amaz.sol. gj1 2 000 1.2 Balance:
23.2 Bank: Station CC gj1 4 000 Amazing Solution 6 000
28.2 Balance: Stationers CC b/d 1 500
Amazing Sol. c/d 11 000 10.2 Equipment: Amaz 7 000
Stationers CC c/d 1 000 17.2 Stationery:Stat C b/d 3 500

18 000 18 000
1.3 Balance:
Amazing Sol. 11 000
Stationers CC b/d 1 000

b/d

Dr Service Fees (I1) Cr

28.2 Balance c/d 31 500 14.2. Bank gj1 14 000
28.2 Bank gj1 17 500
31 500 31 500
28.2 Balance b/d 31 500

Dr Rent (Ex1) Cr
2.2 Bank gj1 2 500

Dr Stationery (Ex2) Cr
17.2 T/payables: stati gj1 3 500

Page 4 of 7
 Accounting 1 study guide On line solutions

Dr Salaries & wages (Ex3) Cr

25.2 Bank gj1 13 000

Dr Electricity (Ex4) Cr
25.2 Bank gj1 3 900

Dr Rent (Ex1) Cr
25.2 Bank gj1 1 100

2.6.4 d) Archi Tect:

Trial balance as at 28 February 2018
Date List of balances as at 28 Feb 2018 Folio Debit - R Credit – R
Equipment A1 15 000
Bank A2 16 300
Capital E1 11 800
Trade payables L1 12 000
Service fees I1 31 500
Rent Ex1 2 500
Stationery Ex2 3 500
Salaries and wages Ex3 13 000
Electricity and water Ex4 3 900
Telephone Ex5 1 100
55 300 55 300

2.6.4 e) Archi Tect:

Statement of profit or loss and other comprehensive income
for the month ended 28 February 2018

Page 5 of 7
Accounting 1 study guide On line solutions

Income 31 500
Service fees 31 500

Distribution, Administration and other expenses (24 000)

Rent 2 500
Stationery 3 500
Salaries & wages 13 000
Electricity & water 3 900
Telephone 1 100

Profit / total comprehensive income for the year 7 500

Archi Tect:
Statement of changes in equity for the month ended 28 February 2018

Capital
R
Balance as at 1 February 2018 11 800
Profit for the year (as per SOCI) 7 500
Balance as at 28 February 2018 19 300

Archi Tect:
Statement of financial position as at 28 February 2018

ASSETS R

Page 6 of 7
Accounting 1 study guide On line solutions

Non-current assets 15 000

Equipment at cost 15 000

Current assets 16 300

Bank 16 300

Total assets 31 300

EQUITY AND LIABILITIES

Equity 19 300

Capital (as per SOCE) 19 300

Current liabilities 12 000

Trade payables 12 000

Total equity and liabilities 31 300

Page 7 of 7