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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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Here are the solutions for Activity 5.3:

  1. Identify the three assets that Blake has in his building business. The three assets are:

    • Bank
    • Equipment
    • Vehicles
  2. Calculate the total value of these assets.

  1. Identify the values of the assets.

    *   Bank: $\text{R } 7\,000$
    *   Equipment: $\text{R } 30\,000$
    *   Vehicles: $\text{R } 55\,000$
    
  2. 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.

  3. Identify the liabilities.

    *   Loan: $\text{R } 15\,000$
    
  4. 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

    1. Calculate the total income that the business has earned.
  5. Identify the values of the income accounts.

    *   Income from building services: $\text{R } 45\,000$
    *   Rent income: $\text{R } 3\,000$
    
  6. 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.

  7. 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: $\text{R } 13\,500$
    
  8. 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.

  9. Use the formula for profit or loss.

    $$
    \text{Profit/Loss} = \text{Total Income} - \text{Total Expenses}
    $$
    
  10. 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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