2.

At January 1 (beginning of its fiscal year), Conover, Inc., a financial services consulting firm, reported the following account balances (in thousands of dollars, except number of shares and par value per share) $ 2,240 Accounts payable Short-term investments Accounts receivable Supplies Prepaid expenses Office equipment Accumulated depreciation-office equipment S 380 1,660 1,210 950 67 7,393 2,520 580 Unearned revenue 4,080 Salaries Payable 320 Short-term note payable 5,400 Common stock ($1 par value) 1,870 Additional paid-in capital (310) Retained earnings a. Received $12,900 cash for consulting services rendered b. Issued 10,340 additional shares of common stock at a market price of $137 per share. c. Purchased $980 of equipment, paying 25 percent in cash and owing the rest on a short-term note d. Received $1,060 from clients for consulting services to be performed in the next year. e. Bought $810 of supplies on account. f. Incurred and paid $2,310 in utilities for the current year. g. Consulted for clients in the current year for fees totaling $1,960, due from clients in the next year. h. Received $6,380 from clients paying on their accounts. i. Incurred $6,550 in salaries in the current year, paying $5,810 and owing the rest (to be paid next year). j. Purchased $1,570 in short-term investments and paid $970 for insurance coverage beginning in the next fiscal year. k. Received $27 in interest revenue eamed in the current year on short-term investments. Required Prepare in good form an income statement for the current year ended December 31. (lgnore income taxes.) (Enter your answer in thousands, not in dollars.) Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March: a. Received $88,000 cash from each of the two shareholders to form the corporation, in addition to S2,800 in accounts receivable, $6,900 in equipment, a van (equipment) appraised at a fair value of $14,600, and $1,600 in supplies. Gave the two owners each 660 shares of common stock with a par value of $1 per share b. Purchased a vacant store for sale in a good location for $440,000, making a $88,000 cash down payment and signing a 10-year mortgage from a local bank for the rest. c. Borrowed $58,000 from the local bank on a 10 percent, one-year note d. Purchased and used food and paper supplies costing $12,430 in March; paid cash. e. Catered four parties in March for $5,000; $1,760 was billed, and the rest was received in cash. f. Made and sold food at the retail store for $12,300 cash. g. Received a $500 telephone bill for March to be paid in April h. Paid $443 in gas for the van in March i. Paid S7,880 in wages to employees who worked in March. j. Paid a $380 dividend from the corporation to each owner. k. Purchased $58,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $24,000 (added to the cost of the building); paid cash. Required: 2. Record in the T-accounts the effects of each transaction for Traveling Gourmet, Inc., in March. Compute ending balances. Cash Accounts Receivable Beg. Bal Beg. Bal. End. Bal End. Bal. Supplies Equipment Beg. Bal Beg. Bal End. Bal. End. Bal Building Accounts Payable Beg. Bal Beg. Bal End. Bal 0 End. Bal Note Payable Mortgage Payable Beg. Bal Beg. Bal End. Bal End. Bal Common Stock Additional Paid-in Capital Beg. Bal Beg. Bal End. Bal End. Bal Retained Earnings Food Sales Revenue Beg. Bal Beg. Bal End. Bal End. Bal Catering Sales Revenue Supplies Expense Beg. Bal Beg. Bal End. Bal End. Bal Utilities Expense Wages Expense Beg. Bal Beg. Bal. End. Bal. End. Bal. Fuel Expense Beg. Bal. End. Bal