Analyzing Transactions and Adjustments Using the Financial Statement Effects Template

On March $1,$ S$.$ Penman launched AniFoods Inc., an organic foods retailing company. Following are the transactions for its first month of business.

S$.$ Penman contributed $$100,000$ cash to the company in return for common stock. Penman also lent the company $$55,000.$ This $$55,000$ note is due one year hence.

The company purchased equipment in the amount of $$50,000,$ paying $$10,000$ cash and signing a note payable to the equipment manufacturer for the remaining balance.

The company purchased inventory for $$80,000$ cash in March.

The company had March sales of $$100,000,$ of which $$60,000$ was for cash and $$40,000$ on credit. Total cost of goods sold for its $$70,000.$

The company purchased future advertising time from a local radio station for $$10,000$ cash.

During March, $$7,500$ worth of radio spots purchased in transaction $5$ are aired. The remaining spots will be aired in April.

Employee wages earned and paid during March total $$17,000$ cash.

Prior to disclosing the financial statements, the company recognized that employees had earned an additional $$1,000$ in wages that will be paid in the next period.

The company recorded $$2,000$ of depreciation for March relating to its equipment.

a$.$ Record the effect of each transaction using the financial statement effects template.

Note: For each account category, indicate the appropriate account name. Enter $"$N$/$A$"$ for any account category that is not used for a given transaction.

Note: Indicate a decrease in an account category by including a negative sign with the amount.

b$.$ Prepare a March income statement and a balance sheet as of the end of March for AniFoods Inc.

Note: Do not use negative signs with your answers.