This problem is the first problem in a sequence that begins an accounting cycle. The cycle is

Question:

This problem is the first problem in a sequence that begins an accounting cycle. The cycle is continued in Chapter 2 and completed in Chapter 3.

Adam Mazella recently left his job to open his own gym equipment repair business. Adam took all of the money he had in his personal savings account and used it to open Fitness Equipment Doctor, Inc., on March 1, 2018. Presented next are the transactions for the first month of operations for Fitness Equipment Doctor, Inc.:

image

Requirements

1. Enter the transactions for Fitness Equipment Doctor, Inc., for the month of March into the expanded accounting equation. Calculate the ending balances at March 31.

2. Prepare the income statement for Fitness Equipment Doctor, Inc., for the first month of operations.

3. Prepare the statement of retained earnings for Fitness Equipment Doctor, Inc., for the first month of operations.

4. Prepare the balance sheet for Fitness Equipment Doctor, Inc., at March 31.

5. Did Adam make a wise decision leaving his job to start Fitness Equipment Doctor, Inc.?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0134727790

5th edition

Authors: Robert Kemp, Jeffrey Waybright

Question Posted: