Question

Question 4 (Marks: 18) The following transactions occurred in the accounting records of Fun for Toys (the entity is not registered for VAT Purposes). The business buys and sells toy products to customers either on cash or credit 1. During the month of February 2020, the following transactions took place: Toys were sold on the 1" of February 2020 to a customer, Mr. Ben Dlamini on credit. The invoice price was R5 000 and cost was R2 000. Toys were purchased on the 15" of February 2020 for cash from Wholesale AB for R2 000 R200 railway charges were incurred to deliver the inventory at the premises of Fun For Toys. These charges will be paid end of next month. 2.

Answer 1

Transection Number Account Affected + or - Asset + or - Liabilities + or - Equity Transection remark 1 Debtor +5000 Debtor + 3000 Profit -2000 -2000 +2000 Inventory Cash Inventory -200 Account payble 1 Inventory 2 Cash 2 Inventory 2 Railway charges 3 Cash 3 Debtor 4 Bank 5 Inventory 5 Cash 6 Bank Sales of Toy on credit increased debtor and profit from transection. Inventory of 2000 reduced due to sale above Purchase of inventory for cash Purchase of inventory for cash Railway charges payble next month Cash received from debtor Cash received from debtor Net interest received return of goods to vendor return of goods to vendor Withdrew for personal purpose +100 Profit +5000 |-5000 +100 -400 +400 -10000 Cash Debtor Bank Inventory Cash Bank -10000 drawings