Reference no: EM132617969
The Shoolongela Farm is a farming food store started by Moose Shoolongela on 1 January 2016. The transactions below relate to The Moose Soolongela for the first three months of trading in 2016:
January Contribution of cash into a bank account by Moose Shoolengela to start business entity N$ 100,000
Bought furniture fixtures and fittings, and paid in cash N$ 21,000
Bought inventory on credit from Organic foods N$ 50,000
Sold goods for cash cost (cost price N$ 6000) N$ 9,000
February Bought furniture, fixtures and fittings on credit from Shop Fitters N$ 18,000
Paid for advertising in cash N$ 4,000
Cash sales (cost price N$ 8 000) N$ 13,000
Returned unsuitable inventory to Organic Foods N$ 500
Paid wages in cash N$ 1,500
March Cash sales (cost price N$ 7 500) N$ 10,000
Sold goods on credit (cost price 6 000) N$ 8,000
Paid Organic foods in cash N$ 40,000
Distribution to owner in cash N$ 5,000
The fixtures and fittings purchased in January were acquired at the beginning of the month, as were those acquired in February. Moose Shoolengela estimates that the useful life of all the fixtures and fittings is ten years and that they will have no value at the end of that time.
You are required to:
Problem a) Record the above transaction on an accounting equation worksheet using the following headings: Bank, Inventory, Accounts receivable, Furniture, Accounts payable, Capital, Income, Expenses and Distributions.
Problem b) Setup a statement of profit or loss for The Moose Shoolengela for the period ended 31 March 2016.
Problem c) Setup a statement of financial position for The Moose Shoolengela at 31 March 2016.