2020 PHS 3E POA EOY P1 Q1

1 Shane started a business, Sheng Yang Store on 1 May 2020. He carried out a number of transactions in the month of May 2020.

Additional information

1. The owner took out an office computer costing $2 100 for his son. This has not been recorded yet.

2. The net realisable value of the inventory was $47 930.

3. Interest expense of $200 was unpaid.


a. State the accounting equation.


b. The following were some transactions in the month of May 2020. Analyse how the transactions would affect the elements in the accounting equation. May 1 transaction is shown as an example.







May 1

Shane transferred
$15 000 from his personal bank to the business bank account.

Cash at bank +$15 000

Capital +$15 000

No effect

May 6

Sheng Yang Store bought furniture for office use, 

$8 000 on credit from Wood Forest.


May 12

Sheng Yang Store paid for insurance by cheque, $100.


May 18

Sheng Yang Store sold inventory costing $5 000 for $8 200 on credit to Sing Lee.



May 20

Sing Lee returned goods sold to him at $400. These cost $280.


[TOTAL 13]