Fakari had the following asset at the ending of the year 2013 having started the business at the beginning of the same year.

kSH.000
Account payables 15,800
equipment 46,000
motor vehicles 25,160
Account receivable 23,080
Cash at bank 29,120
cash in hand 160,000
during that financial year the following transaction took place
1. bought extra equipment on credit for Ksh 5,520,000
2. bought extra inventory by cheque Ksh 2,280,000
3. paid creditor by cheque Ksh 3,160,000
4.receive payment from debtors Ksh 3,360,000 by cheque and Ksh 240 by cash

Questions

identify the capital as at 1st January 2014

prepare a statement of financial position after the transaction have been completed

the net profit for the period was Ksh 750,000

To identify the capital as at 1st January 2014, we need to consider the starting assets, liabilities, and additional transactions that took place during the year.

Starting assets as of the beginning of 2013:
- Account payables: Ksh 15,800
- Equipment: Ksh 46,000
- Motor vehicles: Ksh 25,160
- Account receivable: Ksh 23,080
- Cash at bank: Ksh 29,120
- Cash in hand: Ksh 160,000

Additional transactions during the year:
1. Bought extra equipment on credit for Ksh 5,520,000.
2. Bought extra inventory by cheque for Ksh 2,280,000.
3. Paid creditor by cheque for Ksh 3,160,000.
4. Received payment from debtors: Ksh 3,360,000 by cheque and Ksh 240 by cash.

To calculate the capital as at 1st January 2014, we need to take into account the following equation:

Capital = Net Assets - Liabilities

To calculate the net assets, we sum up the values of all the assets:

Net Assets = Account payables + Equipment + Motor vehicles + Account receivable + Cash at bank + Cash in hand

Net Assets = 15,800 + 46,000 + 25,160 + 23,080 + 29,120 + 160,000 = Ksh 299,160

Now, we need to subtract the liabilities from the net assets:

Capital = Net Assets - Liabilities

Capital = 299,160 - 0 (since there are no liabilities mentioned) = Ksh 299,160

Therefore, the capital as at 1st January 2014 is Ksh 299,160.

Now, let's prepare the statement of financial position after the transactions have been completed:

Statement of Financial Position as at the ending of the year 2013:

Assets:
- Account payables: Ksh 15,800
- Equipment: Ksh 46,000 + Ksh 5,520,000 = Ksh 5,566,000
- Motor vehicles: Ksh 25,160
- Account receivable: Ksh 23,080 + Ksh 3,360,000 = Ksh 3,383,080
- Cash at bank: Ksh 29,120
- Cash in hand: Ksh 160,000 + Ksh 240 = Ksh 160,240
Total Assets: Ksh 9,159,400

Liabilities:
- No liabilities are mentioned.

Owner's Equity:
- Capital as at 1st January 2014: Ksh 299,160
- Net Profit: Ksh 750,000
Total Owner's Equity: Ksh 1,049,160

Since there are no liabilities mentioned, the total assets (Ksh 9,159,400) equal the owner's equity (Ksh 1,049,160).