Journal Entries, Trial Balance, and Financial Statements (Appendix)

Red Robin Messenger Service is incorporated on January 2 and enters into the following transactions during its first month of operations.

Required:

1. Prepare journal entries on the books of Red Robin Messenger Service to record the transactions entered into during the month. How does this entry affect the accounting equation?

Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

January 2: Filed articles of incorporation with the state and issued 100,000 shares of capital stock. Cash of $100,000 is received from the new owners for the shares.

January 3: Purchased a warehouse and land for $60,000 in cash. An appraiser values the land at $20,000 and the warehouse at $40,000. If an amount box does not require an entry, leave it blank.

January 4: Signed a three-year promissory note at Third State Bank in the amount of $30,000.

January 6: Purchased five new delivery trucks for a total of $45,000 in cash.

January 31: Performed services on account that amounted to $15,900 during the month.

January 31: Cash amounting to $7,490 was received from customers on account during the month.

January 31: Established an open account at a local service station at the beginning of the month. Purchases of gas and oil during January amounted to $3,230. Red Robin has until the 10th of the following month to pay its bill.

2. Prepare a trial balance at January 31. If an amount box does not require an entry, leave it blank.

Red Robin Messenger Service
Trial Balance
January 31
	Debit	Credit
	$fill in the blank cedba906bfbdfc3_2	$fill in the blank cedba906bfbdfc3_3
	fill in the blank cedba906bfbdfc3_5	fill in the blank cedba906bfbdfc3_6
	fill in the blank cedba906bfbdfc3_8	fill in the blank cedba906bfbdfc3_9
	fill in the blank cedba906bfbdfc3_11	fill in the blank cedba906bfbdfc3_12
	fill in the blank cedba906bfbdfc3_14	fill in the blank cedba906bfbdfc3_15
	fill in the blank cedba906bfbdfc3_17	fill in the blank cedba906bfbdfc3_18
	fill in the blank cedba906bfbdfc3_20	fill in the blank cedba906bfbdfc3_21
	fill in the blank cedba906bfbdfc3_23	fill in the blank cedba906bfbdfc3_24
	fill in the blank cedba906bfbdfc3_26	fill in the blank cedba906bfbdfc3_27
	fill in the blank cedba906bfbdfc3_29	fill in the blank cedba906bfbdfc3_30
Totals	$fill in the blank cedba906bfbdfc3_31	$fill in the blank cedba906bfbdfc3_32

3. Prepare an income statement for the month of January 31.

Red Robin Messenger Service
Income Statement
For the Month of January
	$fill in the blank 5aceabfef03ef9e_2
	fill in the blank 5aceabfef03ef9e_4
	$fill in the blank 5aceabfef03ef9e_6

4. Prepare a classified balance sheet at January 31.

Red Robin Messenger Service
Balance Sheet
January 31
Assets
Current assets:
	$fill in the blank dca3d4f9501f046_2
	fill in the blank dca3d4f9501f046_4
Total current assets		$fill in the blank dca3d4f9501f046_5
Property, plant, and equipment:
	$fill in the blank dca3d4f9501f046_7
	fill in the blank dca3d4f9501f046_9
	fill in the blank dca3d4f9501f046_11
Total property, plant, and equipment		fill in the blank dca3d4f9501f046_12
Total assets		$fill in the blank dca3d4f9501f046_13
Liabilities and Stockholders' Equity
Current liabilities:
	$fill in the blank dca3d4f9501f046_15
Long-term debt:
	fill in the blank dca3d4f9501f046_17
Total liabilities		$fill in the blank dca3d4f9501f046_18
	$fill in the blank dca3d4f9501f046_20
	fill in the blank dca3d4f9501f046_22
Total stockholders' equity		fill in the blank dca3d4f9501f046_23
Total liabilities and stockholders' equity		$fill in the blank dca3d4f9501f046_24

5. Assume that you are considering buying stock in the company. Beginning with the transaction to record the purchase of the property on January 3, indicate which information you would least consider about each of the transactions during the remainder of the month.

Jan. 3:
Jan. 4:
Jan. 6:
Jan. 31:

Stockholders Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income Jan. 2 Cash Capital stock January 31 Purchased a warehouse and land for $60,000 in cash. An appraiser values the land at $20,000 and the warehouse at $40.000. If an amount box does not require an entry, leave it blank. Balance Sheet Journal Income Statement Net Stockholders Equity Date Description Debit Credit Assets Liabilities + Revenues Expenses Income Jan. 3 3 January 4. Signed a three-year promissory note at Third State Bank in the amount of $30,000. Journal Balance Sheet Income Statement Stockholders Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income Jan. 4 January 6: Purchased five new delivery trucks for a total of $45,000 in cash. a . Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income Jan. 6 January 31: Performed services on account that amounted to $15.900 during the month. Journal Balance Sheet Income Statement Net Stockholders Equity Date Description Debit Credit Assets Liabilities Revenues Expenses Income Jan. 31 January 31: Cash amounting to $7.490 was received from customers on account during the month. Journal Balance Sheet Income Statement Stockholders Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income Jan. 31 January 31: Established an open account at a local service station at the beginning of the month. Purchases of gas and oil during January amounted to $3.230. Red Robin has until the 10th of the following month to pay its bill. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income Jan. 31