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237.
The following schedule reflects shows the first month’s transactions of the Green
Construction Company Inc.:
Accounts
Accounts
Cash
+
Receivable
+
Supplies
+
=
Payable
+
Stockholders’
Equity
1.
+20,000
+20,000
2.
–5,000
3.
+$1,500
+1,500
4.
+3,000
+3,000
5.
+1,000
+1,500
+2,500
6.
–750
–750
7.
+500
–500
8.
–400
–400
9.
–2,000
–2,000
Provide descriptions for each transaction.
238.
The accountant of Action Adventure Games, Inc. prepared a balance sheet after every 10
day period. The only resources invested by the owner were at the start of the company on
June 1. During June, the first month of operation, the following balance sheets were
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prepared:
ACTION ADVENTURE GAMES, Inc.
Balance Sheet
June 10
Assets
Stockholders’ Equity
Cash
$60,000
Common stock +
Retained earnings
$60,000
Total
assets
$60,000
Total liabilities and
equity
$60,000
ACTION ADVENTURE GAMES, Inc.
Balance Sheet
June 20
Assets
Liabilities
Cash
$48,000
Notes
payable
$18,000
Land
10,000
Stockholders’
Equity
Building
20,000
Common
stock +
Retained
earnings
60,000
Total
assets
$78,000
Total
liabilities and
equity
$78,000
ACTION ADVENTURE GAMES, Inc.
Balance Sheet
June 30
Assets
Liabilities
Cash
$51,000
Accounts
payable
$2,000
Office
2,000
Notes payable
18,000
supplies
Land
10,000
Stockholders’
Equity
Building
20,000
Common stock
+ Retained
earnings
63,000
Total
assets
$83,000
Total liabilities
and equity
$83,000
Required:
Describe the nature of each of the four transactions that took place between the balance
sheet dates shown. Assume only one transaction affected each account.
June
10
20
30
10
The owner invested $60,000 cash in the corporation.
20
Land and building were purchased for $12,000 cash and an $18,000 note payable.
Office supplies were purchased for $2,000 on account. Cash was received for $3,000 of
services provided.
239.
Identify the risk and the return in each of the following examples.
a. Investing $500 in a certificate of deposit at 4.5% interest.
b. Placing a $100 bet on an NBA game.
c. Investing $10,000 in Microsoft stock.
d. Borrowing $20,000 in student loans.
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240.
Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service, Inc. from
the following alphabetical list of the accounts at April 30:
Accounts receivable
$10,000
Accounts payable
18,000
Building
28,000
Cash
10,000
Notes payable
47,000
Office equipment
12,000
Common stock
20,000
Retained earnings
?
Trucks
55,000
241.
Prepare a December 31 balance sheet in proper form for Smokey River Supplies, Inc. from
Cash
Accounts payable
Accounts receivable
Notes payable
Office equipment
Total liabilities
Building
Common stock
Retained earnings
Total stockholders’ equity
Total assets
Total liabilities and equity
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the following list of the accounts:
Cash
$10,000
Accounts receivable
8,000
Supplies
12,000
Equipment
35,000
Land
18,000
Accounts payable
13,000
Notes payable
41,000
Stockholders’ equity
29,000
242.
Prepare a December 31 balance sheet in proper form for Cane Property Management, Inc.
using the following accounts and amounts:
Commissions earned
$40,000
Accounts payable
3,500
Cash
Accounts payable
Accounts receivable
Notes payable
Supplies
Total liabilities
Equipment
Land
Common stock + Retained earnings
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Accounts receivable
5,000
Stockholders’ equity
104,500
Office equipment
10,000
Advertising expense
3,200
Cash
7,500
Land
35,000
Note payable
50,000
Office supplies
1,500
Salaries expense
12,000
Salaries payable
1,000
Building
100,000
receivable
Land
Total liabilities
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243.
From the information given below, prepare a November income statement, a November
statement of retained earnings, and a November 30 balance sheet. On November 1 of the
current year, Victoria Garza began Garza Décor, Inc. with an initial investment of $50,000
cash. On November 30, her records showed the following (alphabetically arranged) items
and amounts.
Accounts
payable
$12,000
Office
furnishings
$40,000
Accounts
receivable
19,000
Dividends
6,000
Cash
21,200
Rent expense
9,600
Fees earned
34,000
Salaries
expense
4,200
Notes payable
4,250
Telephone
expense
250
Revenue:
Fees earned
Operating expenses:
Salaries expense
Telephone expense
244.
Data for Kennedy Realty are as follows:
Total assets at January 1
$100,000
Total liabilities at January 1
35,000
Total revenues for the year
79,000
Total expenses for the year
47,000
The owner, Finn Kennedy, received a dividend of $30,000 during the year. Using the above
data, prepare Kennedy Realty’s Statement of Retained Earnings for the year ended
December 31.
Retained earnings, January 1*
Plus Net income
Retained earnings, December 31
*Total assets at January 1
Less total liabilities at January 1
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245.
Jet Styling, Inc. has the following beginning cash balance and cash transactions for the
month of January. Using this information prepare a statement of cash flows.
a.
Beginning cash balance
$3,200
b.
Cash investment by owner
15,000
c.
Cash payment toward long-term loan
1,000
d.
Cash payment of rent
1,800
e.
Purchased equipment for cash
7,500
f.
Purchased store supplies for cash
1,500
g.
Cash collected from customers
7,750
h.
Cash dividend to stockholder
2,000
i.
Cash payment of wages
4,000
Cash paid for supplies
Cash paid for rent
Cash paid for wages
Purchase of equipment
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246.
The records of Roadmaster Auto Rentals, Inc. show the following information as of
December 31. The owner, Rob Fletcher, the sole stockholder, received a dividend of
$52,000 during the year. Prepare a December income statement, a December statement of
retained earnings, and a December 30 balance sheet.
Accounts payable
$36,000
Wages
expense
$75,000
Insurance
expense
2,000
Advertising
expense
22,000
Accounts
receivable
24,000
Cash
11,000
Common stock
50,000
Retained
earnings, January
1
100,000
Office
Furniture
15,000
Airplanes
150,000
Maintenance
expense
39,000
Notes payable
47,000
Revenues
217,000
Hangar
60,000
Revenues
Expenses:
Insurance expense
Wages expense
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247
.
Verity Siding Company, Inc., owned by S. Verity, began operations in May and completed the
following transactions during that first month of operations. Show the effects of the