T. Chin starts a business. Before he actually starts to sell anything he buys fixtures at $2,000, a motor vehicle for $5,000 and inventory for $3,500. Although he has paid in full for the fixtures and the motor vehicle, he still owes his creditors $1,400 for some of the inventories. J. Preston had lent him $3,000. He has $2,800 in the business bank account and $100 cash in hand. From the case study given, you are required to:
a) Itemize the assets that T. Chin has in his business.
b) Calculate the value of T. Chin’s assets.
c) List all of T. Chin’s liabilities.
d) Compute the value of T. Chin’s liabilities.
e) Use the appropriate accounting equation to calculate the value of T. Chin’s capital.