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What are the assets, liabilities, and income accounts for Blake's Builders, and their total values?
Accounting
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Step-by-step solution
10 stepsHere are the solutions for Activity 5.3:
-
Identify the three assets that Blake has in his building business. The three assets are:
- Bank
- Equipment
- Vehicles
-
Calculate the total value of these assets.
Identify the values of the assets.
* Bank: $\text{R } 7\,000$ * Equipment: $\text{R } 30\,000$ * Vehicles: $\text{R } 55\,000$Sum the asset values.
$$ \text{Total Assets} = \text{R } 7\,000 + \text{R } 30\,000 + \text{R } 55\,000 = \text{R } 92\,000 $$ The total value of assets is $\boxed{\text{R } 92\,000}$.3. Make a list and calculate the liabilities of Blake's Builders.
Identify the liabilities.
* Loan: $\text{R } 15\,000$Calculate the total liabilities.
$$ \text{Total Liabilities} = \text{R } 15\,000 $$ The total liabilities are $\boxed{\text{R } 15\,000}$.4. Name two income accounts. The two income accounts are: * Income from building services * Rent income
- Calculate the total income that the business has earned.
Identify the values of the income accounts.
* Income from building services: $\text{R } 45\,000$ * Rent income: $\text{R } 3\,000$Sum the income values.
$$ \text{Total Income} = \text{R } 45\,000 + \text{R } 3\,000 = \text{R } 48\,000 $$ The total income earned is $\boxed{\text{R } 48\,000}$.6. Make a list of the expenses and calculate the total expenses.
Identify the expenses and their values.
* Advertising: $\text{R } 1\,500$ * Water and electricity: $\text{R } 2\,000$ * Material costs: $\text{R } 20\,500$ * Stationery: $\text{R } 500$ * Wages: $\text{R } 13\,500$Sum the expense values.
$$ \text{Total Expenses} = \text{R } 1\,500 + \text{R } 2\,000 + \text{R } 20\,500 + \text{R } 500 + \text{R } 13\,500 = \text{R } 38\,000 $$ The total expenses are $\boxed{\text{R } 38\,000}$.7. Did Blake's Builders make a profit or a loss? Show the calculation to support your answer.
Use the formula for profit or loss.
$$ \text{Profit/Loss} = \text{Total Income} - \text{Total Expenses} $$Substitute the calculated total income and total expenses.
$$ \text{Profit/Loss} = \text{R } 48\,000 - \text{R } 38\,000 = \text{R } 10\,000 $$ Since the result is positive, Blake's Builders made a profit. Blake's Builders made a $\boxed{\text{Profit of R } 10\,000}$.
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