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After a number of years as a successful Chartered Accountant at a national firm, you...

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Accounting

After a number of years as a successful Chartered Accountant at a national firm, you decide to quit the rat race and pursue your true love - yoga. You decide that your neighbourhood would be the perfect place to open a yoga studio. Even better, your friend Yogi, a certified yoga instructor, has just moved to town and is willing to teach at the studio. You hurriedly prepare to open the studio, Manly Yoga, by July 1, 2021. In preparation for your opening, you engage in the following transactions on July 1, 2021:

1. You contribute $18,000 in cash to start the business.

2. You purchase $3,000 worth of equipment for use during classes for cash.

3. You purchase an additional $2,000 worth of yoga mats and clothing for sale at the studio, for cash.

4. You purchase liability insurance at a total cost of $1,600. The policy covers July 1, 2021 through to December 31, 2021.

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