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Peter smart used to wash cars in the back yard his home. He set up a car cleaning business and rented premises, hired 2 staff and moved personal equipment to his business premises where a small office was available. He kept very basic records and after 3 months provided you with the following balances at 1 April 2022:

Account balances at 1 April 2022	R
Bank balance Equipment Consumables on hand Creditors Capital	23 000 41 000 5 200 3 700 ??

The following transactions took place for the month of April 2022

No.

1. Peter transferred R20 000 from his personal savings into the business bank account. Transferred personal vehicle valued at R66 000 for business use.

2. Paid rent for April 2022 by stop order arranged with the bank, R3 200

3. Equipment to clean the inside and undercarriage of vehicles was bought on credit front fast wash for R42 00. The account is payable in three (3) equal annual instalments. The First instalment is payable on 30 April 2022.

4. Made an electronic funds transfer (EFT) of R2 000 in favour odd A flash to set up a web page and on-line advertisements.

5. paid creditors a total of R3 400 on account and bought consumables for R5 600 on credit.

6. Total cleaning fees of R49 000 for the month was deposited into the bank.

7. Peter smart paid Fast wash the first instalment due on 30 April 2022 from his personal bank account.

Required:

2.1 Show workings to calculate the capital at 1 April 2022.

2.2 Process the above transactions through the basic accounting equation for the month ended 30 April 2022 using the format shown below:

No	ASSETS R ACCOUNT	=	EQUITY R ACCOUNT	+	LIABILITIES R ACCOUNT
A.	(5 400) BANK		(5 400) WAGES		0 ----

2.3 State whether the balance owing to creditor Fast Wash should be shown in the statement of financial position as a current or a non-current item. Briefly explain why it should be shown as such.

2.4 Define an asset and provide relevant examples for each classification.

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