Fruitopia Farms was incorporated as a private company on January 1, 2014. The company's accounts included the
Question:
Fruitopia Farms was incorporated as a private company on January 1, 2014. The company's accounts included the following at January 31, 2014:
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During the month of February, the company had the following activities:
a. Paid a dividend to shareholders of $15,000.
b. Repaid $10,000 cash to a local bank.
c. Issued 500 shares for $50,000 cash.
d. Purchased equipment for $30,000, paying $3,000 in cash and signing a note due in six months for the balance.
e. Purchased supplies for $3,000 on account.
Required:
1. Analyze transactions (a) through (e) to determine their effects on the accounting equation.
2. Record the transaction effects determined in requirement 1 using a journal entry format.
3. Summarize the journal entry effects from requirement 2 using T-accounts.
4. Prepare a classified balance sheet at February 28, 2014.
5. As of February 28, 2014, has the financing for Fruitopia's investment in assets primarily come from liabilities or from shareholders' equity?
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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Req 1 Assets Liabilities Shareholders Equity a Cash 15000 Retained Earnings 15000 b Cash 10000 Notes ...View the full answer
Fundamentals of Financial Accounting
ISBN: 978-1259103292
4th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh
