Basic accounting questions, only need questions 3,4,5 answered. very simple dealing with accounting equation (assets=liabilities+shareholder equity)

ACCTG211 - Summer I 2016 (Section 101) Assignment #1 Due: Monday, May 23, 2016 Please submit a stapled hard copy at the beginning of class Clearly put your name on the top of your assignment Feel free to use the accounting equation template available on ANGEL for any of the questions Question 1: Enter the following transactions into the accounting equation, then calculate 1) total assets and 2) net income for the month. All of the transactions took place in the first month of business of Coco's Cookies. A. Coco started the business by contributing $4,500 of her own money in exchange for common stock. B. The company borrowed $3,000 from the bank. C. The company purchased prepaid rent for one year for $2,400 in cash. D. The company purchased $700 worth of cookies and other food items (its inventory) for cash. E. Coco hired a store clerk to work for a total of twelve days in the first month. For this service, Coco paid the employee $50 dollars (cash) for each day worked. F. The company sold half of its inventory for total cash revenues of $1,050. G. Coco's repaid $500 of the bank loan along with $10 of interest, all with cash. Question 2: For each of the transactions in question 1, classify whether it is an operating, investing, or financing activity. Question 3: TJ's Tavern paid $9,600 on March 1, 2012, for a four-year insurance policy. In the company's information system, this was recorded as prepaid insurance. Use the accounting equation to show: A. The purchase of the insurance on March 1, 2012 B. The adjustment TJ's will need to make to properly report expenses when preparing August 31, 2012 financial statements C. The adjustment TJ's will need to make to properly report expenses when preparing March 1, 2013 financial statements Question 4: Record the following transactions for Zero's Zoo in T-accounts and tell how each affects the accounting equation. The year end for Zero's Zoo is December 31. A. On March 1, Zero's Zoo borrowed $15,000 from the bank at 6%, both interest and principal due in one year. B. On May 1, the Zoo purchased a two-year insurance policy beginning immediately, and paid $6,750 cash. C. On July 1, the Zoo prepaid its rent for three years, paying $5,400 in cash. D. On November 1, the company purchased $475 worth of supplies in cash. It had started the year with $375 worth of supplies on hand. E. Over the course of the year, Zero's Zoo earned $54,500 in cash sales. Question 5: Use the information from Question 4 to make the necessary adjustments to Zero's Zoo's accounts in preparation for the year-end financial statements. At year end, there were $175 worth of supplies on hand