Question

a. Received $96,000 cash when Issuing 9,600 new common shares. b. Purchased land by paying $7,500 cash and signing a note payable for $11,500 due in three years. c. Hired a new aesthetician for a salary of $2,600 a month, starting next month. d. NGS purchased a company car for $34,000 cash (list price of $37,000) to assist in running errands for the business. e. Bought and received $950 in supplies for the spa on credit. Pald $230 of the amount owed in (e). g. Nicole sold 100 of her own personal shares to Raea Gooding for $300. CC2-1 Part 3 3. Prepare a classified balance sheet at April 30 using the information given in the transactions. Include Retained Earnings with a zero balance. NICOLE'S GETAWAY SPA Balance Shoot At April 30 Assets Current Assets OU

Answer 1

Prepare journal entries as follows:

Trn.	Account Titles	Debit	Credit
a	Cash	$96,000
	Common stock (9600 shares × $10)		$96,000
b	Land	$19,000
	Cash		$7,500
	Note payable		$11,500
c	Salary in Advance	$2,600
	Cash		$2,600
d	Car	$34,000
	Cash		$34,000
e	Supplies	$950
	Accounts payable		$950
f	Accounts payable	$230
	Cash		$230
g	No entry

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Prepare T-accounts as follows:

Cash
a	$96,000	b	$7,500
		c	$2,600
		d	$34,000
		f	$230
End. Bal.	$51,670
Accounts payable
f	$230	e	$950
		End. Bal.	$720

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Prepare Balance sheet as follows:

Nicole's Gateway Spa
Balance Sheet
At April 30
Assets
Current Assets:
Cash	$51,670
Salary in advance	$2,600
Supplies	$950
Total Current assets		$55,220
PPE:
Land		$19,000
Car		$34,000
Total assets		$108,220
Liabilities:
Current liabilities
Accounts payable	$720
Total current liabilities		$720
Note payable		$11,500
Stockholders' equity:
Common stock		$96,000
Retained Earnings		$0
Total Liabilities and SE		$108,220