Instructions As you recall, you have started a business, Main Squeeze, that will sell lemonade. You have decided to incorporate the company for legal liability and taxation reasons.

The following are some of Main Squeezes transactions that occurred in April;

a. You put $3,000 cash into the company and signed over your car (with a value of $5,000). In exchange the company issued 8,000 shares to you. b. Purchased a lemonade stand/trailer paying $600 cash on signing and financing the remainder with a loan over 5 years. The stands purchase price is $6,000. c. Entered into a 5-year seasonal lease for prime boardwalk space with the city of saint john. Payments are $500 monthly from May to September. d. Purchased a new juicer machine for $1,500 cash, and a water filtration system for $800 signing a short term note payable due in 4 months, e. Ordered $500 worth of inventory of (lemons, sugar and cups) to be received May 3. f. Hired a part-time employee for $1,500 per month who will start in May.

1.For each of the events, prepare journal entries if a transaction of the business exists, checking that credits equal debits. If a transaction does not exist, explain why there is no transaction for the business. 2.Create T-accounts, and post each of the transactions to determine balances at April 30th. Because this is a new business, beginning balances are $0 3.Prepare a trial balance, prepare a classified statement of financial position (with current assets and current liabilities sections) at April 30th (before beginning operations in May) 4.For each of the events, indicate if it is an investing activity (I) or financing activity (F) and the direction (+ for increases and for decreases) and the amount of the effect on the cash flows using the following structure. Write NE if there is no effect on Cash flows. 5.Calculate the current ratio at April 30th. What does this ratio indicate about the ability of Main Squeeze to pay its current liabilities?