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Problem 3-2 Transaction Analysis and Financial Statements Just Rolling Along Inc. was organized on May 1, 2007, by wo college students who recog nized an opportunity to make money while spending their days at a beach along Lake Michi- gan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations. May 1: Received contribution of $9,000 from each of the two principal owners of the May 1: Purchased 10 bicycles for $300 each on an open account. The company has 30 May 9: Purchased 20 pairs of in-line skates at $125 per pair, 20 heimets at $50 each, and May 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days new business in exchange for shares of stock. days to pay for the bicycles. 20 sets of protective gear (knee and elbow pads and wrist guards) at $45 per set May 5: Registered as a vendor with the city and paid the $15 monthly fee. for cash to pay for the supplies. May 17: Customers rented in ine skates and bicycles for cash of $1,800. May 24: Billed the local park district $1,200 for in-line skating lessons provided to neigh- borhood kids. The park district is to pay one half of the bill within five working days and the rest within 30 days May 29: Received 50% of the amount billed to the park district. May 30: Customers rented in-line skates and bicycles for cash of S3,000. May 30: Paid wages of $160 to a friend who helped out over the weekend. May 31: Paid the balance due on the bicycles.
Required 1. Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with the date. 2. Prepare an income statement for the month ended May 31, 2007 3. Prepare a classified balance sheet at May 31, 2007
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Answer #1

The answer has been presented in the supporting sheets. The detailed accounting equations has been presented in detail. The income statement and balance sheet has been constructed. For detailed answers refer to the supporting sheets.

ssssssss - Microsoft Excel HomeInsert Page Layout Formulas Data Review View 11 A A ,wrap Text General Copy Format Painter Blu-田· »-a- = = =- ˊ函Merge & Center. S. %, ala Conditional asor ble . Styles、 Insert Delete Format Sort &Find & 2 Clear Filter Select Editing r Clipboard Amount in S 2 Accounting Equation Assets Liabilities+ stockholders Equity Liabilities AccountTotal recievab Assets Monthly Supplies Wages- Assets Payables $18,000 $18,000 +$18,000+ $0$18,000+ 7 Balance 18000 $18,000 $3,000 9 Balance $18,000 $3,000 $0 $21,000$3,000$18,000 + $0$21,000 11 Balance $17,985 $3,000$0$20,985$3,000$18,000$0 $0 $20,985 ($4,400$4,400 Balance513,585$7400 14 May 10 15 $0 $20,985$3,000$18,000 + $0$20,985 S100 $7400$100 0 $21,085$3,100 $18,000 + $0 $20,960$3,100 $18,000 + $o $22,760$ $21,085 Balance$13,585 16 May 15 17 Balance 18 May 17 19 Balance 20 May 24 21 Balance 125$20,960 $13,460 $1,800 $15,260 +$1,800 $7.400$100 $3,100 +$18,000$1,800 100 $1,200 $23,960 $3,100$18,000 $3,000 $23,960 | -| $3.100 | +| $18,000 | +| $3,000 $15,260 5 $125$23,960 23 Balance$15,860 $7,400$100 $125 | $23,960」Ci ate Windows 4 4 SheetlSheet2 10:36 AM Search the web and Windows

ssssssss - Microsoft Excel Home Insert Page Layout Formulas Data Review View cut Σ AutoSum Aa-=-=渺1 ョwrap Text 11 Custom , Copy Fill Paste r Format Painter B 1 u-田ㄧ Cr -- = t Delete FormtClar Filter 函Merge & Center, al;o Corr ditti nalasoamat . styles. s % , Insert Delete Format Sort &Find & Format Painter B Formatting as Table Styles Clipboard Font Alignment Styles Cells Editing A23 Balance FG H I Amount in S Total Liabilities and 2 Accounting Equation Liabilities+ tockholders Equity Assets Fixed Account Common Advertising fees 4 Date Account Total Monthly Fees Revenue Wages- Assets Payables Stock 23 Balance$15,860$7.400S100 600 $23,960 $3,10018,000,000$15$0 24 May 30$3,000 $125$23,960 $125$26,960 $15$160$125$26,800 $12523,800 +$3,000 25 Balance$18,860$ 26 $7,400$100 $600 $26,960$3,100$18,000$6,000 $7,400$100$600 $26,800$3,100$18,000$6,000 $100 +$18,000$6,000 $160 27 Balance$18,700 28 May 31($3,000) ($3,000)+ 7400 $100 $600 $23,800 29 Balance 15,700 30 31 32 $15 $160 34 35 37 38 39 ctivate Windows 41 4Sheet1 Sheet2 10:37 AM ^曰脈49奉甲1/30/2019 Search the web and Windows

DATE PAGE No 2 Tust Rollin 2002 cula boas Mon $1s 阜125 5300 Jetincema ean used it has bean assumad thet ne dino acts aveqiven abaut it hoit has beun

DATE PAGE No. XAN S300 Otal Assets Cusdant Liabilihes Common slock ーToh0Liabuinea and equities $23800

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