Question 1 [17] ACCOUNTING EQUATION

C Colours CC is a small retail outlet that sells well-known brands of paint and related products to the local community and surrounding areas. The business is owned by Charles Colours and he started the business in 2005.

The following are a list of transactions of C Colours for March 2020:

1. The owner deposited R14 000 directly in the bank account to increase his capital.
2. Sold goods for cash, R7 500, with a markup of 20% on cost.
3. Drew a cheque for cash float, R1 300.
4. The owner, Mr C Colours, drew a cash cheque to put fuel in his car, R650.
5. Paid the telephone account by cheque, R315.
6. Bought goods on credit, R4 000.
7. Paid casual wages out of petty cash, R150.
8. A debtor, who owes R450, has been declared insolvent. Received a cheque of 50 cents in the rand. Write off the balance as irrecoverable.
9. Received a cheque for rent of storeroom, R590.
10. The bank statement shows that the firms account has been debited with service fees, R56, and credit card charges, R44, and credited with interest, R35.

Required:

Apply the accounting equation as at 31 March 2020 using the table format provided below and then test the correctness of your answer by applying the duality concept/principle.

Example:

The business has not paid the latest account for advertising, R500.

No.	ASSETS		=	EQUITY		+	LIABILITIES
	DR / +	CR /		DR /	CR / +		DR /	CR / +
				500				500
1
2
3
4
5
6
7
8
9
10