Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help finish. Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand by
Please help finish.
Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March: a. Received $102,000 cash from each of the two shareholders to form the corporation, in addition to $4,200 in accounts receivable, $9,700 in equipment, a van (equipment) appraised at a fair value of $17,400, and $2,300 in supplies. Gave the two owners each 940 shares of common stock with a par value of $1 per share. b. Purchased a vacant store for sale in a good location for $580,000, making a $116,000 cash down payment and signing a 10-year mortgage note from a local bank for the rest. c. Borrowed $72,000 from the local bank on a 10 percent, one-year note. d. Purchased food and paper supplies costing $14,600 in March; paid cash. e. Catered four parties in March for $6,400; $2,040 was billed and the rest was received in cash. f. Sold food at the retail store for $18,000 cash; the food and paper supplies used cost $11,270. (Hint: Record the revenue effect separate from the expense effect.) g. Received a $640 telephone bill for March to be paid in April. h. Paid $583 in gas for the van in March. i. Paid $10,680 in wages to employees who worked in March j. Paid a $520 dividend from the corporation to each owner. k. Purchased $72,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $31,000 (added to the cost of the building); paid cash. Accounts Payable 0 Beg. Bal. Beg. Bal. Building 0 580,000 31,000 640 (9) (k) End. Bal. 611,000 End. Bal. 640 Note Payable Beg. Bal. Beg. Bal. Mortgage Payable 0 464,000 72,000 ) (b) End. Bal. 72,000 End. Bal. 464,000 Common Stock Additional Paid-in Capital Beg. Bal. Beg. Bal. 1,880 (a) End. Bal. 1,880 End. Bal. 0 Retained Earnings 0 1,040 Beg. Bal. 10) Beg. Bal. Food Sales Revenue 0 18,000 (1) End. Bal. 1,040 End. Bal. 18,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started