Question

Question 4
The following figures are from the books of Pala-Pala Investment for the year ended 30 June
2017.
Motor Vehicle - Cost 180 000
Cash 1 400
Loan: SME Bank 35 500
Loan: Std Bank 15 000

Accrued Income 7 000
Drawings 22 000
Uniform 28 000
Salary paid for 31.07.2017 5 600
Net Profit 45 800
Debtors 12 500
Creditors 18 000
Bank Overdraft 2 500
Telephone 16 000
Machinery – Cost 50 000
Motor vehicle expenses 12 600
Administration fees 11 000
Inventory 01.07.2016 4 500
Inventory 30.06.2017 8 500
Fixtures and fittings 28 000
Rent paid in advance 1 000
Water and Electricity 17 000
Depreciation Expense 5 000
Computer Equipment 6 000

Using elements of financial statement, group the accounts under the respective elements and
calculate the amount of Capital missing.

Answer 1

Capital

218700

Working:

Assets = Liabilities + Equity

Equity = Assets - Liabilities

Equity = 300,000 - 71,000

=229,000

Equity = Capital-Drawings+ Net income

Capital = Equity+Drawings - Net income

Capital = 229,000+22,000-45,800

=205,200

Expenses
Uniform	28000
Telephone	16000
Motor Vehicle expenses	12600
Administration fee	11000
Water and electricity	17000
Depreciation expense	5000
Assets
Cash	1400
Debtors	12500
Inventory - 30.06.2017	8500
Salary paid in advance	5600
Rent paid in advance	1000
Accrued Income	7000
Current Assets	36000
Motor Vehicle - cost	180000
Machinery cost	50000
Fixtures and fittings	28000
Computer Equipment	6000
Total Assets	300000
Liabilities
Creditors	18000
Loan SME bank	35500
Loan : STD Bank	15000
Bank overdraft	2500
Total Liabilities	71000