Answer to Question #279157 in Finance for LIZIE

Question

On May 1 Blake started a business and deposited Ksh 5,000,000 into a bank account opening specifically for the business.

a)     Assume on May 3 2006 Blake buys a building for Kshs. 3,000,000 paying by cheque.

b)     Blake purchased goods for resale for Kshs. 500,000 on account and agrees to pay after one week.

c)     May 6 goods that had cost Blake Ksh 100,000 were sold to Brown for the same amount on account. Brown becomes a debtor

d)    On May 13 goods which had cost shs 50,000 were sold to Dolley for the same amount and she paid immediately by cheque

e)     On May 15 Blake pays a cheque for shs 200,000 to Smith in part payment of the amount

• owing.

f)      J. Brown who owed Blake Ksh 100,000 makes part payment of Ksh. 75,000 by cheque on May 20 2006

Required

Prepare the initial financial statement position, make the effect the transactions on the statement and prepare the final Statement of financial position.

Answer 1

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