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SevenSeas Technologies. Basic formulation of balance sheets and analysing the effects of business transactions……. Brief Summary of transactions. Day 1: Emilie invests £50,000 of her own cash. Day 2: Obtains £25,000 loan from Barclays Bank.

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Sevenseas technologies

SevenSeas Technologies

Basic formulation of balance sheets and analysing the effects of business transactions……


Brief summary of transactions
Brief Summary of transactions

  • Day 1: Emilie invests £50,000 of her own cash.

  • Day 2: Obtains £25,000 loan from Barclays Bank.

  • Day 3: Purchased one laptop computer for £3,000 on credit from Dell.

  • Day 4: Purchased computer accessories for £1,000 cash payment.

  • Day 5: Received £5,000 in cash from sales.

  • Day 6: Pay £1,500 back to creditor Dell.

  • Day 7: Paid salaries to employees £1,500 and office rent £2000

  • Day 8: Sold software services for £8,000 but “not” received.

  • Day 9: Withdrew £2,000 for personal use.


Assets liabilities shareholder s owner s equity
Assets = Liabilities + Shareholder’s / Owner’s Equity

SevenSeas: Balance Sheet as at Day 1.

Assets: £

Cash 50,000

Owner’s Equity

Emilie 50,000


SevenSeas: Balance Sheet as at Day 2.

Assets: £

Cash 75,000

Liabilities:

Creditors (Barclays Bank) 25,000

Owner’s Equity 50,000


SevenSeas: Balance Sheet as at Day 3.

Assets: £

Cash 75,000

Office Equipment (laptops) 3,000

78,000

Liabilities:

Barclays Bank 25,000

Dell 3,000

Owner’s Equity

Emilie 50,000


SevenSeas: Balance Sheet as at Day 4.

Assets: £

Cash 74,000

Office Equipment 4,000

78,000

Liabilities:

Barclays Bank 25,000

Dell 3,000

Owner’s Equity

Emilie 50,000


SevenSeas: Balance Sheet as at Day 5.

Assets: £

Cash 79,000

Office Equipment 4,000

83,000

Liabilities:

Barclays Bank 25,000

Dell 3,000

Owner’s Equity

Emilie 50,000

Retained Profits 5,000


SevenSeas: Balance Sheet as at Day 6.

Assets: £

Cash 77,500

Office Equipment 4,000

81,500

Liabilities:

Barclays Bank 25,000

Dell 1,500

Owner’s Equity

Emilie 50,000

Retained Profits 5,000


SevenSeas: Balance Sheet as at Day 7.

Assets: £

Cash 74,000

Office Equipment 4,000

78,000

Liabilities:

Barclays Bank 25,000

Dell 1,500

Owner’s Equity

Emilie 50,000

Retained Profits 1,500


SevenSeas: Balance Sheet as at Day 8.

Assets: £

Cash 74,000

Office Equipment 4,000

Debtor 8,000

86,000

Liabilities:

Barclays Bank 25,000

Dell 1,500

Owner’s Equity

Emilie 58,000

Retained Profits 1,500


SevenSeas: Balance Sheet as at Day 9.

Assets: £

Cash 72,000

Office Equipment 4,000

Debtor 8,000

84,000

Liabilities:

Barclays Bank 25,000

Dell 1,500

Owner’s Equity

Emilie 56,000

Retained Profits 1,500


The rule asset liabilities and owner s equity
The Rule: Asset = Liabilities and Owner’s Equity

Assets = Liabilities + Owner’s Equity

£ £ £

7,2000 (Cash) 25,000 (Barclays Bank) 56,000 (Emilie)

4,000 (Office Eqp) 1,500 (Dell) 1,500 (Profits)

8,000 (Debtors)

£ 84,000 = £26,500 + £57,500


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