Lecture 1 – Trans’s Clothing Alterations

Tran’s Clothing Alterations began operations on 1 Mar 2020 and completed the
following transactions during the first month.

i. Tran deposited RM18,000 of her personal funds in a current account at a bank

opened in the name of the business.
ii. Sewing equipment was purchased at a cost of RM9,000, of which RM5,000
was paid in cash. A loan payable was given for the remainder of RM4,000.
iii. Tran collected RM1,500 from customers for alteration services performed.
iv. Rent was paid for the month of July, RM1,200.
v. Sewing supplies amounting to RM700 were purchased on credit.
vi. Wages of $500 were paid as well as an account for electricity, RM250.
vii. Tran paid for the sewing supplies purchased in (v) above.
viii. Sewing supplies used during July amounted to RM300.

Required
A. Prepare a schedule. List the following assets, liabilities and equity as column
headings: Cash at Bank; Supplies; Equipment; Loan Payable; Accounts Payable;
Tran, Capital.
B. Illustrate the effects of each of the transactions on the accounts listed. Indicate
totals after each transaction and complete the schedule.
C. Prepare an income statement and a statement of changes in equity for the month
ended 1 Mar 2020.
D. Prepare a balance sheet as at 31 Mar 2020.