4.

Transaction Analysis and Financial Statements

Just Rolling Along Inc. was organized on May 1 by two college students who recognized an opportunity to make money while spending their days at a beach along Lake Michigan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations:

May 1 Received contribution of $9,500 from each of the two principal owners of the new business in exchange for shares of stock.

May 1 Purchased ten bicycles for $260 each on an open account. The company has 30 days to pay for the bicycles.

May 5 Registered as a vendor with the city and paid the $25 monthly fee.

May 9 Purchased 30 pairs of in-line skates at $140 per pair, 30 helmets at $60 each, and 30 sets of protective gear (knee and elbow pads and wrist guards) at $55 per set for cash.

May 10 Purchased $95 in miscellaneous supplies on account. The company has 30 days to pay for the supplies.

May 15 Paid $150 bill from local radio station for advertising for the last two weeks of May.

May 17 Customers rented in-line skates and bicycles for cash of $1,620.

May 24 Billed the local park district $1,100 for in-line skating lessons provided to neighborhood children. The park district is to pay one-half of the bill within five working days and the rest within 30 days.

May 29 Received 50% of the amount billed to the park district.

May 30 Customers rented in-line skates and bicycles for cash of $2,600.

May 30 Paid wages of $220 to a friend who helped over the weekend.

May 31 Paid the balance due on the bicycles.

Required:

Complete the table below to summarize the preceding transactions as they affect the accounting equation. Enter transactions in the same order as presented above.

If an account is unaffected by a transaction, enter "0". Use the minus sign to indicate decreases.

JUST ROLLING ALONG INC.

TRANSACTIONS FOR THE MONTH OF MAY

Assets = Liabilities + Stockholders' Equity

Date Cash Accounts Receivable Equipment Supplies Accounts Payable Capital Stock Retained Earnings

May 1 $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 1 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 5 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 9 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 10 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 15 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 17 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 24 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 29 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 30 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 30 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

May 31 _________________ _________________ _________________ _________________ _________________ _________________ _________________

Balance $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

TOTAL ASSETS: $ _________________ TOTAL LIABILITIES AND Stockholders' Equity: $ _________________

Prepare an income statement for the month of May.

Just Rolling Along Inc.

Income Statement

For the Month of May

Revenues:

$

Total Revenues

$

Expenses:

$

Total Expenses

$

3. Prepare a classified balance sheet at May 31.

Just Rolling Along Inc.

Balance Sheet

May 31

Assets

Current assets:

$

Total current assets

$

Property, plant, and equipment:

Total assets

$

Liabilities and Stockholders' Equity

Current liabilitie

$

$

Total stockholders' equity

Total liabilities and stockholders' equity

$

5.

Transaction Analysis and Financial Statements

Blue Jay Delivery Service is incorporated on January 2 and enters into the following transactions during its first month of operations:

Required:

1. Complete the below table to summarize the preceding transactions as they affect the accounting equation. Ignore depreciation expense and interest expense. If an account is unaffected by a transaction, enter "0". Use the minus sign to indicate decreases.

Blue Jay Delivery Service

Transactions for the Month of January

Assets = Liabilities + Stockholders' Equity

Date Cash Accounts Receivable Trucks Warehouse Land Accounts Payable Notes Payable Capital Stock Retained Earnings

Jan. 2 $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 3 _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 4 _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 6 _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 31 _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 31-Services _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Jan. 31-Gas & oil _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

Bal. $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________ $ _________________

Total Assets $ _________________ Total Liabilities and Stockholders' Equity $ _________________

2. Prepare an income statement for the month of January.

Blue Jay Delivery Service

Income Statement

For the Month Ended January 31

$

$

3. Prepare a classified balance sheet at January 31

Blue Jay Delivery Service

Balance Sheet

January 31

Assets

Current assets:

$

Total current assets

$

Property, plant, and equipment:

$

Total property, plant, and equipment

Total assets

$

Liabilities and Stockholders' Equity

Current liabilities:

$

Long-term debt:

Total liabilities

$

$

Total stockholders' equity

Total liabilities and stockholders' equity

$