Principles of Accounting & Financial Arrangement, Dealership With ABC Limited & Ayethu Transactions Case Study - Accounting Assignment Help

Assignment Task

Answer the following questions:  

Question 1 

The following transactions, among others, appeared in the accounting records of  Ayethu General Dealers (‘Ayethu’) for the month of July 2020: 

No. Transaction details 

1. A new vehicle costing R120 000 was bought through a financial arrangement with the dealership. 

2. A debtor who owes R500 is unable to pay the amount due. The business decided to write-off 70% of the amount. 

3. Inventory worth R500 was returned to the supplier. This was previously bought on credit. 

4. Office chairs to the value of R1 560 were bought and paid for in cash. 5. An R3 500 loan was received from the bank, payable after five years at  7% interest per annum. 

6. Several customers returned inventory worth R1 200, as it was damaged. 7. The owner of Ayethu withdrew R2 300 from the business bank account for his own personal use. 

8. The company invested R1 000 in their fixed deposit account, which matures after two years.

Required:  

Show the effect of the above transactions in the accounting equation by inserting the correct amount in the appropriate column in the table below. 

Example: 1. Bought goods on credit worth R15 000  

Question 2

Read the scenario below and answer the question that follows:  

You have been presented with the following transactions of ABC Limited. The company’s accountant recently resigned and you were asked to act in her capacity. The previous accountant did not understand the different source documents that should have been issued or received. Furthermore, she was confused with the different journals in which these transactions should be recorded. 

Transactions:  

1. In March 2020, the owner, Ms Turnip, increased her capital from  R100 000 to R300 000. This occurred through her acquiring a vehicle to  the value of R150 000 and a cash deposit of R50 000, totalling R200 000. 

2. On 12 March 2020, inventory (with a cost price of R8 000) was sold for cash to Mr Bullton, totalling R15 000. 

3. On 15 March 2020, inventory (with a cost price of R5 000) was sold on credit to Ms Cowing, totalling R12 000. 

4. On 17 March 2020, Mr Bullton returned certain goods that were damaged, to the value of R780 (see 12 March 2020). 

5 On 26 March 2020, interest income on a positive bank balance was received from NBF Bank, totalling R150. 

Required:  

 In the table below, indicate the correct source document that is required for each transaction in the scenario. Also, identify the correct journal that should be used  to record these transactions

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