Joe's business had the following assets and liabilities on 31 March 2011: $ Non-current assets 120000 Liabilities due within one year 25 000 Current assets 35 000 Liabilities due in over one year 50 000 REQUIRED (a) Calculate the: Capital Capital employed During the month of April 2011, Joe recorded the following transactions: 1 Bought goods on credit from Henry, $200. 2 Sold goods costing $300, to Mary for the selling price of $500, on credit. 3 Sent Henry a cheque for $190 in full settlement of his debt of $200. 4 Mary returned goods with a selling price of $50.

1. (a)Calculate the: Capital Capital employed[2]
2. (b)Complete the grid below and show the amount and effect on capital of each transaction. The first transaction has been completed as an example. Transaction Book of prime entry Accounts to be debited Accounts to be credited Effect on capital $ 1 Purchases Purchases Henry $ Nil Journal 2 3 4[12]
3. (c)(i)State the purpose of the three documents used in transactions 2 to 4 above. Invoice[2]
4. (c)(ii)Cheque counterfoil[2]
5. (c)(iii)Credit note[2]