Question

: As at January 01, 2019, Apex Ltd. had a total current assets of $124,000, fixed assets $600,000, liabilities $508,000,
and equity balance of $216,000. Following are the transaction which were entered by the business during the year
Record all the tranactions to show how these will affect the accounting equation of the business.
1 Company purchased equipment for $50,000 on account
2 Incurred rent of $2,000 to be paid in the next month
3 Bought a car for $85,000, paid $13,000 as dowpayment, and obtained loan for rest of the amount.
The company has to pay $400 on license and registration
4 Company accrued salaries of $10,800
5 Company paid $1,500 as utility expenses
6 Charged depreciation of $6,500
7 Sold old equipment for $30,000, out of which, $6,000 is yet to be received
8 Sales revenue generated during the year $200,000, and collections were only for $184,000
9 A customer, who owed company $9,500, refused to pay. The final settlement was made for $4,200
10 Company had an opening balance of $29,000 towards the suppliers. During the current period,
Company settled all of this balance
11 Company had an investment of $12,000 in common shares. During the year, the company sold these share for $14,500
12 Company had a short term debt of $24,000, which was paid off during the year along with an interest of $2,000
13 Company issued equity shares of $75,000

Answer 1

Journal Entries will be as follows:

S. No	Account and explanations	Debit	Credit
1	Equipment	$50,000
	Accounts Payable		$50,000
(To record purchase of equipment on account)
2	Rent	$2,000
	Rent payable		$2,000
(To record rent expenses)
3	Car	$85,400
	Cash		$13,400
	Loan		$85,400
(To record purchase of car)
4	Salaries Expenses	$10,800
	Salaries Payable		$10,800
(To record salaries expenses payable)
5	Utility Expenses	$1,500
	Cash		$1,500
(To record payment of utility expenses)
6	Depreciation	$6,500
	Accumulated Depreciation		$6,500
(To record depreciation expenses)
7	Cash	$24,000
	Accounts Receivable	$6,000
	Equipment		$30,000
(To record sales of equipment)
8	Cash	$184,000
	Accounts Receivable	$16,000
	Sales Revenue		$200,000
(To record sales )
9	Cash	$4,200
	Bad Debts	$5,300
	Accounts Receivable		$9,500
(To record final setllement from debtors)
10	Accounts payables	$29,000
	Cash		$29,000
(To record payment to supplier)
11	Cash	$14,500
	Investment in shares		$12,000
	Gain on sale of shares		$2,500
(To record sale of investment)
12	Short term debt	$24,000
	Interest Expenses	$2,000
	Cash		$26,000
(To record payment of debt)
13	Cash	$75,000
	Common shares		$2,500
(To record issue of shares)