Faara had the following assets and liabilities on 1 May 2015. Inventory $ Trade receivable - Jaafar 2850 Other payables – Electricity 600 Bank 200 5% Bank loan (30 September 2020) 450 Credit Motor vehicle 5000 4500 REQUIRED

1. (a)Calculate Faara's capital.[1]
2. (b)The following transactions related to the account of Jaafar for the month ended 31 May 2015. May 4 Sold goods to Jaafar, list price $1500, allowed 15% trade discount. 5 Jaafar returned goods purchased on 4 May, list price $120. 16 Jaafar paid the amount owing on 1 May by cheque and was allowed 2% cash discount. Prepare the ledger account of Jaafar for the month of May 2015. Balance the account and bring down the balance on 1 June 2015. Jaafar account Date Details $ Date Details $[5]
3. (c)State two possible reasons why Faara allowed trade discount to Jaafar.[2]
4. (d)The following information related to the electricity account for the month ended 31 May 2015. May 17 Paid for electricity by cheque $440. 31 Prepared the income statement. It was estimated that $55 was owed for electricity at that date. Prepare the electricity account for the month of May 2015. Balance the account and bring down the balance on 1 June 2015. Electricity account Date Details $ Date Details $[5]
5. (e)Name the accounting concept applied to the calculation of electricity expense when preparing the income statement at 31 May 2015.[1]
6. (f)Complete the following table for the transactions shown. Name the source document prepared by Faara and the book of prime entry used, and state the effect of the transaction on her capital. The first item has been completed as an example. | | Source document | Book of prime entry | Effect on owner's capital ($) | |:---|:---|:---|:---| | May 9 Sold goods on credit for $900, (cost $600). | Sales invoice | Sales journal | +300 | | 14 Customer returned goods, bought by him on 9 May for $300. | | | | | 21 Paid wages in cash $150. | | | |[6]