Jones’ Mower Repairs began operations on 1 August 2016 and completed the following transactions during the first month.
1. Darren Jones deposited $35 000 of his personal funds in a current account at a bank opened in the name of the business.
2. Mower repair equipment was purchased at a cost of $24 000, of which $14 000 was paid in cash. A loan payable was given for the remainder.
3. Darren collected $5000 from customers for repair services performed.
4. Shop rent was paid for the month of August, $1500.
5. Supplies amounting to $2100 were purchased on credit.
6. Wages of $1200 were paid as well as an account for electricity, $250.
7. Darren paid for the supplies purchased in (5) above.
8. Supplies used during August amounted to $750.
Required
A. Prepare a schedule. List the following assets, liabilities and equity as column headings: Cash at Bank; Supplies; Equipment; Loan Payable; Accounts Payable; D. Jones, Capital.
B. Show 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 31 August 2016, and a as at 31 August 2016.
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