Choice Chicken Company was organized on January 1, 2017. At the end of the first quarter (three months) of operations, the owner prepared a summary of its activities as shown in the first row of the following tabulation:

Required:1. For each of the six transactions given in this tabulation, enter what you consider the correct amounts. Enter a zero when appropriate. The first transaction is illustrated.2. For each transaction, explain the basis for your responses.

Transcribed Image Text:

Computation of Summary of Transactions Net earnings Cash +$85,000 a. Services performed for customers, $85,000, of which $15,000 remained uncollected at the end of the quarter. +$70,000 b. Cash borrowed from the local bank, $25,000 (one-year note). c. Small service truck purchased at the end of the quarter to be used in the business for two years starting the next quarter: cost, $8,000 cash. d. Wages earned by employees, $36,000, of which one-sixth remained unpaid at the end of the quarter. e. Service supplies purchased for use in the business, $4,000 cash, of which $1,000 were unused (still on hand) at the end of the quarter. f. Other operating expenses, $31,000, of which one-half remained unpaid at the end of the quarter. Based only on these transactions, compute the following for the quarter: Net earnings (or loss) Cash inflow (or outflow)