Question

on at 28 February 2013 ASSIGNMENT 01 (continued) 2 Miday Garden Services provides you with the folowing information at 28 Feb ASSIGNM 50 BO 000 250 000 100 000 Machinery Bank Vehicles - Dale Golf Course, a diant of Middy Garden Services, owes R30 000 Garden Services for garden services rendered in January 20.9 • Middy Garden Services owes Clean It Machines R5 000 What is the net asset value (equity of Middy Garden Services as at 28 February 20. (1) 123 (3) (4) 15) 445 000 450 000 440 000 435 000 406 000 Which of the following statements are correct? (a) When income eamed by an entity is more than its expenditure, the entity makes profil b) When the income earned by an entity is less than its expenditure, the entity man profil c) The profit that an entity makes, increases the net worth of the owner. (d) The loss that an entity makes, decreases the net worth of the owner. (e) The statement of financial position measures the financial performance of an ently (1) a,b,c,d and e (2) abc and e. (3) .cd and e. (4) 8.b,c and d. (5) B., and d Gizmo Traders bought a new electricity generator to be used during load shedding Luna Lights for R50 000 and paid for it through an electronic funds transfer (EF effect wil the above transaction have on the accounting equation il Gizmo Trade favourable bank balance? Equity R50.000 Liabile +R50 DOD tR50 000 R50 000 *R100 000 +R50 000 +R50 000 R50 000 R50 000

Answer 1

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Answer (5)
calculation of net assets value of Middy Garden servise;
total assets:
Machinery	$80,000
Bank	250000
Vehicles	100000
add :cleans it machinery	5000
Total assets	435000
Liabilities:
amount payable to Dale Goll Course	30000
Total liabilities	30000
Net assets value = Total assets-Total liabilities
= 435000-30000
=405000
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Answer(2)
a. when the company earned by an entity is more than its expenditure , the entity makes a profit .For example,a company makes sales of good of $20000 where cost of good sold is $15000 than company makes profit of $5000(20000-15000)
c.The profit that an entity makes , increases the net worth of the owner. Net worth = total assets - total liabilities=equity of shareholders, we know that profit add in shareholder equity .so profit increase the net worth of company
d.The loss that an entity makes, decreases the net worth of the owner.Loss of the company decrease the shareholder equity that means less from retaining earning so it decrese the net worth of company
e.The statement of financial position measures the financial performance of an entity.Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. The term is also used as a general measure of a firm's overall financial health over a given period.
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Answer (2)
Electricity generator ia assets so in accounting equation that increase in assets and another side cash paid for purchase of it so that effect in decrease in cash .Electricy fund that not affect in accountion equation.this fund is cancelled.