Question 1 This question is meant to determine how well you understand transaction analysis The ABC Pizza Store is a small pizzeria with limited seating The company has just started business on July 1, 2000 For each transaction given below for the month of July 2000, provide the appropriate journal entry or place the entry within a balance sheet equation format (assets liabilities plus owners' equity) On July 1, 2000, the owners, Bob, Rachel, and Steve invested a total of $100,000 in return for a total of 10,000 shares of $2 par value common stock, which began the ABC Pizza Store (the company) On July 1, the company also borrowed $25,000 from a local San Francisco bank The loan is for two years and has an annual interest rate of 12 Interest will be paid every three months beginning on October 1, 2000 On July 1, the company signed a one year lease for the store location they will occupy Their monthly rental is $7,000, and they had to pay the first and last month's rent in advance Their rental location was the site of a former pizzeria, and all the necessary equipment such as pizza ovens, counters, and refrigeration units were available The landlord owned the equipment, and its cost to the company was included in the monthly lease payment On July 2, the company did have to buy new furniture at a cost of $9,500, as well as plates, utensils, and cups for $3,700 Both the furniture and the tableware were paid in cash On July 3, the company contacted a local printer to prepare menus and advertising brochures The company agreed to pay $2,500 for the menus and brochures They will be ready on July 6 On July 3, the company contacted a popular San Francisco radio station and agreed to have advertising run every business day during the afternoon drive time starting on Wednesday July 5 to Monday August 1 (represents 20 business days) The cost of the advertising is $20,000, of which half was paid immediately and the remaining half will be paid when the advertising run ends Since the company planned on delivering pizzas, the ABC pizza truck was purchased for $25,000 The amount was paid in cash

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 22, 2024

Question 1: This question is meant to determine how well you understand transaction analysis. The ABC Pizza Store is a small pizzeria with limited seating.

Question 1:This question is meant to determine how well you understand transaction analysis. The ABC Pizza Store is a small pizzeria with limited seating. The company has just started business on July 1, 2000. For each transaction given below for the month of July 2000, provide the appropriate journal entry or place the entry within a balance sheet equation format (assets = liabilities plus owners' equity).

On July 1, 2000, the owners, Bob, Rachel, and Steve invested a total of $100,000 in return for a total of 10,000 shares of $2 par value common stock, which began the ABC Pizza Store (the company).
On July 1, the company also borrowed $25,000 from a local San Francisco bank. The loan is for two years and has an annual interest rate of 12%. Interest will be paid every three months beginning on October 1, 2000.
On July 1, the company signed a one-year lease for the store location they will occupy. Their monthly rental is $7,000, and they had to pay the first and last month's rent in advance.
Their rental location was the site of a former pizzeria, and all the necessary equipment such as pizza ovens, counters, and refrigeration units were available. The landlord owned the equipment, and its cost to the company was included in the monthly lease payment. On July 2, the company did have to buy new furniture at a cost of $9,500, as well as plates, utensils, and cups for $3,700. Both the furniture and the tableware were paid in cash.
On July 3, the company contacted a local printer to prepare menus and advertising brochures. The company agreed to pay $2,500 for the menus and brochures. They will be ready on July 6.
On July 3, the company contacted a popular San Francisco radio station and agreed to have advertising run every business day during the afternoon drive time starting on Wednesday July 5 to Monday August 1 (represents 20 business days). The cost of the advertising is $20,000, of which half was paid immediately and the remaining half will be paid when the advertising run ends.
Since the company planned on delivering pizzas, the ABC pizza truck was purchased for $25,000. The amount was paid in cash.