Reference no: EM132540810

Question - The following transactions relate to Xolani Spark's new electrical business, Xolani Electrical, for the month of February 2013:

a. On 1 st February, Xolani Spark deposited RS 30 000 cash into a bank account in the name of the business as part of his capital contribution.

b. Xolani transferred a vehicle, with a book value of RS 90 000, into the name of the business as the second part of his capital contribution (on 1st February).

c. Two days later he took out a loan with Beep Bank to the value of RS 5 000. The funds/ proceeds from the loan were received the same day.

d. On 5th February he bought tools to the value of RS 10 000 and a stepladder for RS 2 000. These items, to be used as his electrical equipment, were paid for in cash.

e. On 7th February he repaired an air-conditioning system for a customer and received RS 8 000 cash in exchange for his services.

f. Gamma Ltd requested Xolani to install a security lighting system to the value of RS 22 000 for which they paid him RS 12 000 upfront on the 10th February, being the day he started and completed the installation. It was agreed that Gamma limited would settle the balance of its account at the end of March.

g. Xolani hired a hydraulic lift on the 11th February to assist him with a job. He paid the hiring fee of RS 2 000 in cash.

h. Xolani needed to buy stock of wires, connectors and switches which cost him RS 6000 from Electro Ltd on 11th February. He bought these on credit.

i. On 25th he paid his workshop rent of RS 3 000 and RS 1 000 for his mobile phone contract.

j. On 27th February Xolani paid the first installment of RS 500 on his loan. (Ignore interest.)

k. He paid his assistant RS 5000 as a salary on 27th February.

l. On 27th February Xolani paid Electro Ltd RS 2000 towards his outstanding account.

m. Xolani withdrew RS 7000 from the business account on the 29th of February for his personal living expenses.

n. Depreciation on the vehicle (per transaction 'b') has not yet been accounted for. Xolani estimated that he could use the vehicle (in transaction 'b') for three years (with no residual value) in order to calculate the annual depreciation. He decided to adopt the straight-line method and needed to record the depreciation monthly.

REQUIRED - Journal Entries, worksheet and Tell the Profit or Loss and the Total Balance Sheet Value of Assets.