Question
Exercise 4-5 Record transactions and calculate financial statement amounts LO 2, 6, 7 The transactions relating to the formation of Blue Co. Stores, Inc., and
Exercise 4-5 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 $8,600. |
b. | The firm borrowed $5,200 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 $1,930, but a discount was received because the seller was having a sale. |
d. | A store location was rented, and $1,200 was paid for the first month's rent. |
e. | Inventory of $14,300 was purchased; $8,800 cash was paid to the suppliers, and the balance will be paid within 30 days. |
f. | During the first week of operations, merchandise that had cost $4,800 was sold for $5,200 cash. |
g. | A newspaper ad costing $130 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 $4,350 was purchased; cash of $1,100 was paid, and the balance is due in 30 days. |
i. | In the last three weeks of the first month, sales totaled $13,250, of which $9,400 was sold on account. The cost of the goods sold totaled $8,200. |
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 $3,300 from the sales on account recorded in transaction i. |
l. | The firm paid a total of $4,150 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) |
see table in attachment below |
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. |
see table in attachment below |
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