Chapter 2: Statements of Financial Position 29 Prepare a table to show the twofold effect of each of these six transactions listed, (Hint: use the for-' mat of the table shown in figure 2.7.) Exercise 2.6: The owner of Prestige Paints has provided the following list of transactions in relation to her business: April 1 C. Barry (owner) banked $28 000 to commence a business account Bought goods to sel in the shop for $12 000 cash Sold stock for $1 200 cash (cost price $700) Paid rent $500 Purchased stock on credit for $8 000 Sold stock for $1 900 cash (cost of sale $900) Paid creditor $2 000 of amount owing Borrowed $5 000 from EZ Finance a Prepare a worksheet to show the twofold effect of these transactions. Follow the format shown in figure 2.8 and use the following headings: Assets: Cash at bank, Stock Liabilities: Creditor, Loan Owner's equity: Capital wuMaMawn b Prepare a statement of financial position as at 8 April 2005, taking into account all these trans- actions. Exercise 2.7: The following information comes from the books of Lombardo Locks: May 1 The owner contributed cash of $35 000 and a vehicle valued at $25 000 to the business Bought stock on credit for $12 000 from Wholesale Locks Bought shop fittings for $14 000, paying $4 000 deposit with the balance due in 30 days to Colin the Carpenter Sold goods for cash $3 000 (cost price $1 200) Sold goods on credit to S. Catania for $2 000 (cost price $800) Paid wages for week $500 Purchased more stock on credit from Wholesale Locks $8 000 Paid for the purchases made on 2 May The owner withdrew $1 000 from the business for personal use Received cash from S. Catania $1 200 Secor Ms a Prepare a worksheet to show the twofold effect of the listed transactions for the period 1-10 May. 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It began operations in Journalise transactions, post, March 2015. The Movie Palace is unique in that it is a drive-in theatre and will show and prepare a trial balance. only triple features of sequential theme movies. As of 28 February, the ledger of The {03,5.6,7.8) Drive-in Movie Palace Ltd showed: (100) Cash $19 100; (110) Equipment $19 100; (120) Land $45 100; (130) Buildings $21 100; (200) Accounts Payable $15 100; and (00) Share Capital $89 300. During the month of March the following events and transactions occurred: Mar. 2 Acquired the three Bourne movies (The Bourne Identity, The Bourne Supremacy and The Bourne Ultimatum) to be shown for the first 3 weeks of March. The film rental was $15 100; $8000 was paid in cash and $7100 will be paid on 10 March, 3 Ordered the Jron Man trilogy to be shown on the last 10 days of _ March. It will cost $500 per night. 9 Received $11 600 cash from admissions. 10 Paid balance due on the Bourne movies rental and $7100 on 28 February accounts payable. 11 Hired B. Barista to operate a coffee cart, Barista agrees to pay The Drive-in Movie Palace Ltd 20% of gross receipts, payable monthly. 12 Paid advertising expenses $3900. 20 Received $10 300 cash from admissions. 20 Received the Jron Man movies and paid rental fee of $5000. 31 _ Paid salaries of $6900. 31 Received statement from B. Barista showing gross receipts from. coffee cart sales of $11 100 and the balance due to The Drive-in Movie Palace Ltd of $2220 for March. B. Barista paid half the balance due and will remit the remainder on 5 April. 31 Received $21600 cash from admissions. In addition to the accounts identified above, the chart of accounts includes: (105) Accounts Receivable, (400) Admission Revenue, (410) Coffee Cart Revenue, (500) Advertising Expense, (510) Film Rental Expense, and (520) Salaries Expense, Required (@) Using T accounts, enter the beginning balances in the ledger. () Journalise the March transactions, including narrations. (©) Post the March journal entries to the ledger accounts you prepared in part (a). (d) Prepare a trial balance as at 31 March 2015. Chapter 2: The recording process 139