Exercise 4-5 (Algo) Record transactions and calculate financial statement amounts LO 2, 6, 7 The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow. a. The firm was organized and the stockholders invested cash of $8,100. b. The firm borrowed $5,300 from the bank; a short-term note was signed. c. Display cases and other store equipment costing $1,700 were purchased for cash. The original list price of the equipment was $1,940, but a discount was received because the seller was having a sale. d. A store location was rented, and $1,500 was paid for the first month's rent. e. Inventory of $15,500 was purchased; $9,800 cash was paid to the suppliers, and the balance will be paid within 45 days. f. During the first week of operations, merchandise that had cost $4,900 was sold for $5,400 cash. 9. A newspaper ad costing $110 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month. h. Additional inventory costing $4,050 was purchased; cash of $1,150 was paid, and the balance is due in 30 days. i. In the last three weeks of the first month, sales totaled $15,000, of which $9,400 was sold on account. The cost of the goods sold totaled $8,100. j. Employee wages for the month totaled $2,000; these will be paid during the first week of the next month. k. The firm collected a total of $3,900 from the sales on account recorded in transaction i. I. The firm paid a total of $4,300 of the amount owed to suppliers from transaction e. Required: a. Record each transaction in the appropriate columns. Indicate the financial statement effect. b. Calculate the total assets, liabilities, and stockholders' at the end f the month and calculate the amount of net income for the month. c. After completing parts a through I, prepare an income statement for Blue Co. Stores Inc. for the month presented and balance sheet at the end of the month. Check my work Answer is not complete. Complete this question by entering your answers in the tabs below. Required Required Required Required A B C1 C2 Record each transaction in the appropriate columns. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) + STOCKHOLDERS' Transaction ASSETS Accounts Cash + Receivable + Merchandise Inventory Retained LIABILITIES Accounts Payable Notes Payable + + Equipment E Paid-in + Capital 8,100 Earnings + Re a. 8,100 b. 5,300 5,300 C. (1,700) 1,700 d. (1,500) e. (9,800) 15,500 5,700 f. 5,400 (4,900) g. 110 2,900 h. (1,150) 4,050 i. 5,600 9,400 (8,100) j. 2,000 k. 3,900 (3,900) I. (4,300) 5,500 1,700 = 5,300 10,710 0 + Required B > 9,850 + + 6,550 + < Required A + + 8,100 + + X Answer is not complete. Complete this question by entering your answers in the tabs below. Required Required Required Required A B C1 C2 Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month. Assets $ 23,600 Liabilities Stockholders' Equity Net Income < Required A Required C1 > Complete this question by entering your answers in the tabs below. Required Required Required Required A B C1 C2 After completing parts a through I, prepare an income statement for Blue Co. Stores Inc. for the month presented. (Enter decreases with a minus sign to indicate a negative income statement effect.) BLUE CO. STORES INC. Income Statement Effect Sales Cost of goods sold Gross profit Rent expense Advertising expense Wages expense www. Net income Required C2 > < Required B X Answer is not complete. Complete this question by entering your answers in the tabs below. Required Required Required Required A B C1 C2 After completing parts a through I, prepare a balance sheet for Blue Co. Stores Inc. at the end of the month. BLUE CO. STORES INC. Balance Sheet Assets: Cash Accounts receivable Merchandise inventory Total current assets Equipment Total assets Liabilities: Notes payable Accounts payable Total liabilities Stockholders' Equity: Paid-in-capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 0 0 0 0 $ 0 < Required C1 $ 2 $ Co Required C2 >