Date Business transactions and events Amount

Dec 1 Olivia invests personal savings into the business 50,000

Dec 1 The business obtains a long-term loan of €15,000 from a local bank 15,000

Dec 1 The boutique purchases high-end mannequins and displays for cash 10,000

Dec 1 The business acquires a computer system for managing inventory on 1-month credit terms 5,000
During the month of December
The boutique acquires a designer clothing line for cash ((which will be offered for sale in the
boutique). 20,000

The boutique purchases trendy accessories for the boutique on credit terms (which will be
offered for sale in the boutique) 8,000

The business issues a cheque for the computer system bought on Dec 1. 5,000

Clothing items with a cost of €9,000 are sold to customers for a total of €18,000. All paid immediately

The business pays its employees their monthly wages 7,000

At the end of the month

Dec 31 The mannequins and displays have depreciated in value by €1,000 since acquisition

Some accessories are deemed obsolete and are written off. They were originally valued at €800
Dec 31 but have no resale value now
The business pays the 1st month interests on the long term loan (15000). The interest rate is
Dec 31 0,4% per month.
Date Business transactions and Cash at Trade Stock of Fixed Trade Long-term Share Revenue + Expenses -
events bank debtors goods assets creditors& loans Capital
accruals
Dec 1 Olivia invests personal savings
into the business 50 50
Dec 1 Business obtains a long-term
loan of €15,000 from a local
bank 15 15
Dec 1 Boutique purchases high-end
mannequins and displays for
cash (10) 10
Dec 1 Business acquires a computer
system for managing inventory
on 1-month credit terms 5 5
During the month of December
Boutique acquires a designer
clothing line for cash (Which
will be offered for sale in the
boutique). (20) 20
Boutique purchases trendy
accessories on credit terms
Which will be offered for sale in
the boutique). 8 8
Business issues a cheque for the
computer system (5) (5)
Clothing items with a cost of
€9,000 are sold to customers for
a total of €18,000. All paid
immediately. 18 (9) 18 (9)
Business pays its employees
their monthly wages (7) (7)
At the end of the month
Dec 31 Mannequins and displays have
depreciated in value by €1,000
since acquisition (1000) (1000)
Dec 31 Some accessories are deemed
obsolete and are written off.
They were originally valued at
€800 but have no resale value
now (0.8) (0.8)
TRANSACTION EFFECTS ON THE BALANCE SHEET
NUMBER

1 Equipment+10 A/P +10

2 AR (8) Cash +8 ; AP (6) Cash (6)

3 NCL +5 Cash +5

4 Inventory +2000 AP +2000

5 Revenue +4 Cash +4

6 Equity (3) Cash (3)

7 Equity (1) Cash (1)

8 Equity (0.5) AP +0.5

9 Equity (0.5) Equipment (0.5)

10 Equity (4) Inventory (4)

Income statement
Revenue 4 000
Expenses
Supplies used up (4 000)
Salaries (3000)
Rent (1000)
Adv (500)
Dep (500)

Net Income (5000)

 Statement of CF
• Opening balance 20000
Operating CF
AR +8000
AP(6000)
Sales +4000
Salaries (3000)
Rent (1000)
Investing CF 0
Financing CF
Loan +5000

• Closing balance 27000

Balance Sheet

Cash 27000 AP 16500

AR 7000 Loan 25000
Of supplies 3000
Land 80000 Capital 100000
Equipment 50000 Ret earnings 30000
-Dep (500) Loss (5000)

Total 166500 Total 166500