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No entry was made for trading inventory that was taken by the proprietor for his personal use, R2 000

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 3TF: LO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and...

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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1. No entry was made for trading inventory that was taken by the proprietor for his personal use,R2 000.2. Inventories on 28 February 2019 according to physical stocktaking were as follows:2.1 Trading inventory R135 0002.2 Stationery R2 0003. The telephone account of R1 000 for February 2019 was erroneously paid twice, on 25February 2019 and 27 February 2019.4. Rent has been received up to 31 January 2019.5. A debtor, P. Peter, was declared insolvent. On 28 February 2019, his insolvent estate paid afirst and final dividend of 60 cents in the Rand. An amount of R1 800 was received andrecorded. The balance of his account must now be written off.6. The provision for bad debts must be increased by R1 000.7. The insurance total includes an amount of R7 200 that was paid for the period 01 November2018 to 31 October 2019.8. Interest on loan for February 2019 has not yet been paid. Interest is not capitalised.Note: A repayment of R18 000 (excluding interest) is expected to be made in March…
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