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QUESTION ONE [20] The following related to lan Bender who started his own panel beating business, Bender's Panel Beaters, on 1 July 2019 (the financial year end is 30 June) 2019 1July (eg) Bender deposited R60 000 into the business bank account as his initial capital 2 July Bender transferred personal equipment valued at R35 000 as additional capital 3 July Obtained a loan of R100 000 from his cousin. A Luckman. The loan bears Interest at 10% per year and is payable in two equal annual instalments. The first instalment is payable on 30 June 2022 and the second on 30 June 2023. Purchased new equipment from Bob Squares for R50 000 on credit The account will be paid by tive monthly instalments. The first instalment is due to be paid on 31 August 2019. 4 July 5 July Paid R4 500 as rent for July 2019. Payment was made by means of an electronic funds transfer to D Landlord, the owner of the premises. 10 July A client made a direct deposit of R11 420 for services rendered. Required: 1.1. Process the above transactions through an accounting equation such as the one shown in the format below: (10) Date Liabilities Assets Non-current Current R R Equity Capital Income R expenditure Current Non-current R 2019 R 1.7 (eg) 0 60 000 60 000 0 0 0 1.2. Briefly describe the reason for your treatment of the Loan from A Luckman (refer to transaction dated 3 July 2019 above). With reference to IFRS (International Financial Reporting Standards). provide a definition of the element to which you allocated the "Loan from A Luckman". An explanation and motivation for the deposit of R100 000 into the bank account is NOT required. (5) 1.3 1.4 Preparation of financial statements is based on the accrual principle. Briefly explain the accrual principle (3) Ian Bender enquired as to why he had to keep accounting records and prepare financial statements. Provide a response by providing a short explanation of the objective of financial accounting. ( (2)

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