Maria had the following assets and liabilities on 1 May 2014. Inventory $ 1950 Amount payable – Midland Telecoms 400 Bank 550 Dr 5% Bank loan (repayable 30 April 2018) 2500 Fixtures and fittings 1500 REQUIRED

1. (a)(i)Owner's capital[1]
2. (a)(ii)Capital employed[1]
3. (b)The following related to the purchase of telephone services for the three months to 31 July 2014. 31 May Paid Midland Telecoms' balance on 1 May 2014 by cheque. 26 June Received a telephone bill from Midland Telecoms $1200. 15 July Paid telephone bill received on 26 June by cheque less 2% cash discount. 31 July Prepared an income statement for the three months to 31 July 2014. It was estimated that $130 was owing. Prepare the following ledger accounts for the three months to 31 July 2014. Midland Telecoms account Date Details $ Date Details $ Telephone expenses account Date Details $ Date Details $[9]
4. (c)Name and explain the accounting concept applied in estimating the telephone expenses owing on 31 July 2014. Accounting concept Explanation[3]
5. (d)The following were some of the transactions which took place in July. 5 July Purchased inventory on credit. 10 July Goods returned by a credit customer. 20 July Paid wages in cash. 25 July Disposed of fixtures and fittings on credit. Complete the following table for the above transactions naming the source document prepared by Maria and the book of prime entry used. The first item has been completed as an example. Source document Book of prime entry 5 July Purchase invoice Purchases journal 10 July 20 July 25 July[6]