Question
e firm was organized and the stockholders invested cash of $7,000. The firm borrowed $5,700 from the bank; a short-term note was signed. Display cases
e firm was organized and the stockholders invested cash of $7,000.
The firm borrowed $5,700 from the bank; a short-term note was signed.
Display cases and other store equipment costing $1,600 were purchased for cash. The original list price of the equipment was $1,930, but a discount was received because the seller was having a sale.
A store location was rented, and $1,400 was paid for the first month's rent.
Inventory of $14,900 was purchased; $8,400 cash was paid to the suppliers, and the balance will be paid within 45 days.
During the first week of operations, merchandise that had cost $4,500 was sold for $6,000 cash.
A newspaper ad costing $140 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month.
Additional inventory costing $4,050 was purchased; cash of $1,350 was paid, and the balance is due in 30 days.
In the last three weeks of the first month, sales totaled $13,000, of which $9,400 was sold on account. The cost of the goods sold totaled $8,400.
Employee wages for the month totaled $1,800; these will be paid during the first week of the next month.
The firm collected a total of $3,650 from the sales on account recorded in transaction i.
The firm paid a total of $4,950 of the amount owed to suppliers from transaction e.
Required:
a. Record each transaction in the appropriate columns. Enter decreases to account balances as a negative.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
+
b. Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.
c. After completing parts a through l, prepare an income statement for Blue Co. Stores, Inc., for the month presented and a balance sheet at the end of the month.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting Tools For Business Decision Making
Authors: Paul D. Kimmel
3rd Edition
0470377852, 978-0470377857
