Fung Research Services (FRS) Case

On August 2014, Grace Fung incorporates and opens Fung Research Services Inc. (FRS). During the

company's first ten days of operations, it completes the following transactions:

1.

To begin operations, Grace Fung deposits $400,000 of personal funds in a bank account entitled

Fung's Research Services Inc. and the business issues shares of common stock in the amount of

$400,000. Grace had obtained the $400,000 by selling off RRSPs that she had saved over the

years. $400,000 was the proceeds used from the sale of $500,000 worth of RRSPs.

2.

FRS pays $300,000 cash for a small house which is to be used as an office.

3.

Grace has a personal use residential property from which she does some work although the bulk

of her days are spent at the FRS offices in the other small house. She does repairs on the

residential property in the amount of $10,000 although this is not to be expensed against the

business as such an expenditure is considered to be a personal and living expense.

4.

Grace goes over to Staples/Business Depot and buys $500 worth of office supplies for the

business. She opens up a charge account with Staples/Business Depot and thus has 30 days to

pay.

5.

FRS finds a government surplus office equipment sale in the newspaper and goes to an auction

to buy office equipment. A bargain is found and FRS pays $6,000 cash for office furniture.

6.

The company pays $250 on the Staples/Business Depot purchase in #4.

7.

Grace decided she needs a vacation and pays herself a $1,000 dividend out of FRS.

8.

FRS does some research work for the Hamilton Tiger Cats and bills them $15,000. She receives

$5,000 immediately in cash and the balance is to be paid in 90 days (the Ti-Cats are in dire straits

from a cash-flow point of view, but Grace is understanding, plus she needs the work).

9.

Grace realizes that she has used $100 worth of supplies and decides to expense it accordingly.

What would posted entries to T-accounts, ending balances, trial balance of FRS at August 10, 2014 and financial statements look like for for the first 10 days of operations at FRS