3. Goodwin Bikes began operations in April 2022 and had the following transactions.

1. Owner invested $120,000 cash and a truck worth $36,000 in exchange for stock.
2. Paid $84,000 cash for 6 months rent.
3. Purchased $300,000 of bicycle inventory on credit.
4. Sold bicycles for cash of $507,000. The cost of the bikes sold was $180,000.
5. Sold and invoiced bicycles to a client for $95,400. The cost of the bikes sold was $48,000.
6. Paid $90,000 cash for an advertising campaign in connection with Tour de France. The campaign will run over the next two of months.
7. Paid $24,000 in cash for supplies to have on hand for bike repairs.
8. Collected $60,000 from accounts receivable.
9. Paid for bikes purchased on credit in Transaction c above.
10. Paid cash dividends of $3,000.
11. Received $6,000 cash from a customer as a deposit for a custom bicycle to be built.

Required: Record each transaction a) through k) in the financial statements effects template A.

At the end of April, the following information is available:

i. At the end of April, $19,200 supplies remained on hand.

ii. Rent paid in Transaction b is for a lease that began on April 1.

iii. At the end of April, one-third of the advertising campaign in Transaction f was completed.

iv. The truck is expected to be used for five years (60 months).

v. The custom bicycle in Transaction k was built and delivered to the customer on April 30.

Required: Record any accounting adjustments required for items i. through v., in the financial statement effects template B.

Problem #3A

Balance Sheet

Income Statement

Transaction

Cash Asset

+

Noncash Assets

=

Liabil- ities

+

Contrib. Capital

+

Earned Capital

Rev- enues

Expen-ses

=

Net Income

a)

=

=

b)

=

=

c)

=

=

d)

=

=

e)

=

=

f)

=

=

g)

=

-

=

h)

=

-

=

i)

=

-

=

j)

=

-

=

k)

=

-

=

Problem 3B

Balance Sheet

Income Statement

Transaction

Cash Asset

+

Noncash Assets

=

Liabil- ities

+

Contrib. Capital

+

Earned Capital

Rev- enues

Expen-ses

=

Net Income

i

=

=

ii.

=

=

iii.

=

=

iv.

=

=

v.

=

=