Business, 07.06.2021 16:40, anonwarrior

Jay is the owner of the business Jay's Supplies and wants to buy a motor vehicle. He has a friend named Kyle who works at Cars R Us and offers Jay a motor vehicle worth
$30,000 for $20,000. Jay decides to buy the motor vehicle to be used in the business
with a bank loan and has an invoice issued.
Jay's Supplies also hasn't been performing well this year and therefore Jay wants to use
a trading period of 2 years for accounting purposes to make the performance look
better.
Answer the following questions using applicable accounting conventions to support your
answers where appropriate;
a) At what price must Jay record the motor vehicle for and why?
b) Can Jay use a 2 year trading period and why/why not?
c) How many accounts are affected in this transaction? Why and what are they?
d) Prove that equality of the accounting equation is maintained.

Answers: 2

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Jay is the owner of the business Jay's Supplies and wants to buy a motor vehicle. He has a friend n...