Three former college classmates decided to open a store near campus to sell wireless equipment to students. They created a public company and issued stock to interested investors. Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the COMPANY accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.

Transaction 1 On March 1, the three classmates opened a checking account for the company at a local bank. They each deposited $25,000 in exchange for shares of stock. A few of their friends also purchased stock totaling $15,000 that was deposited in the company account.

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Transaction 2

The company quickly acquired $45,000 in inventory, 70% of which was paid for in cash. The rest was acquired on open accounts that were payable after 30 days.

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Transaction 3 A store was rented for $1,000 per month. A lease was signed for one year on March 1. Rent for the first 3 months was paid in advance. [Note: Record the March 1 transaction first and the March 31 adjustment second.]

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Transaction 4 Website advertising was purchased for $4,000. They were able to get a good deal because one of the company's owners also owns stock in the website company. The company also paid $5,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

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Transaction 5 Sales were $70,000. Cost of merchandise sold was 50% of its sales price. 70% of the sales were on open account. [Note: Record the sales transaction first and the expense transaction second]

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Transaction 6 Wages and salaries incurred in March amounted to $11,800, of which $4,300 was paid.

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Transaction 7 Miscellaneous expenses paid for in cash were $1,400.

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Transaction 8 On March 1, fixtures and equipment were purchased for $5,500 with a downpayment of $1,500 plus a $4,000 note payable in one year. Interest of 5% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. Depreciation on the fixtures and equipment is computed on a straight-line basis. [Note: Record the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]

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Transaction 9 Cash dividends totalling $3,000 were declared and paid to stockholders on March 31.

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