Refer to the following transactions entered into by Allen Traders during the year ended 30 June 2012 and answer the question that follow: Transaction 1. 2. 3. 4. 5. 6. 7. 8. The owner deposited R 60 000 into business account as his contribution to the business Sold goods on credit to F Meko, R 7 000 The business obtained a loan of R30 000 from FNB. Bought stationery on credit, R300 Cash sales of goods, R6 500. The goods were bought for R4 000 Purchased furniture and equipment on credit from FBD Ltd R5 000 The owner used a business cheque to pay for his personal accounts, R4 000 Purchased Equipment worth R60 000. R42 000 was paid using cash and the remainder will be paid in 3 months' time.

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…