Leung commenced business on 1 April 2010 with inventory (stock) $500 and bank $6000. Leung also has a bank loan of $3500 which is repayable in full on 31 March 2013. REQUIRED

1. (a)Calculate on 1 April 2010, the
2. (a)(i)owner's capital[1]
3. (a)(ii)capital employed[1]
4. (b)In the first days of trading, Leung completed the following transactions. (i) Paid rent, $200, by cheque. (ii) Purchased goods, $1500, on credit from Ying. (iii) Sold goods costing $1000, for $1800, on credit to Tung. (iv) Purchased office equipment, $4000, paying by cheque. (v) Paid his account to Ying of $1500 and was allowed 4% cash discount. Complete the table below. The first item has been completed as an example. Item | Book of prime entry | Effect on current assets | Effect on current liabilities | Effect on capital --- | --- | --- | --- | --- (i) | Cash book | -200 | No effect | -200 (ii) | (iii) | (iv) | (v) |[16]
5. (c)On 31 May 2010, Leung extracted the following balances from his books. $ Gross profit 6650 Inventory (stock) 4600 Bank loan 3500 Trade Receivables (debtors) 1200 Trade Payables (creditors) 2100 Office equipment 4000 Bank 1750 Dr Discount received 150 Rent and expenses 3850 Capital ? REQUIRED (c) Prepare the trial balance at 31 May 2010.[10]