Question

B с D E F G H K M Each of the remaining sheets in this file contains 1) a description of a transaction and 2) a partially completed balance sheet, income statement, and statement of retained earnings. For each transaction, show how the financial statements would change. Each transaction is independent, so you can work through the file in any order you like. All changes are entered in the blue cells on the statements. Each statement has two columns. Values in the first column are selected from a drop-down menu. For a given transaction, there may be several (or even many) blue cells that do not need to be changed. 7 B 30 41 Instructions Trans1 Transz Trans Trans 4 Trans 5 READY

Answer 1

Transaction: Issued 2,000 shares for $200,000 cash.

Statement of Financial Position			Income Statement
ASSETS
Current assets:
Cash	200000		Gross profit
			Operating expenses:
Total current assets	200000
Total assets	200000		Total operating expenses
LIABILITIES AND SHAREHOLDERS' EQUITY			Earnings from operations
Liabilities
Current liabilities:			Earnings before income taxes
			Net income
Total current liabilities
Total liabilities
Shareholders' Equity			Statement of Retained Earnings
Common stock	200000		Beginning balance
Total shareholders' equity	200000
Total liabilities and shareholders' equity	200000		Ending balance

Transaction: Borrowed $30,000 cash from a local bank, payable June 30, 2016.

Note: The date of the statement of financial position is not given hence, it is not possible to determined whether it is a current liability or long term liability. Kindly mention the date under the comments section.

Statement of Financial Position			Income Statement
ASSETS
Current assets:
Cash	30000		Gross profit
			Operating expenses:
Total current assets	30000
Total assets	30000		Total operating expenses
LIABILITIES AND SHAREHOLDERS' EQUITY			Earnings from operations
Liabilities
Current liabilities:			Earnings before income taxes
Notes payable	30000
			Net income
Total current liabilities	30000
Total liabilities	30000
Shareholders' Equity			Statement of Retained Earnings
			Beginning balance
Total shareholders' equity
Total liabilities and shareholders' equity	30000		Ending balance

Transaction: Bought a building for $141,000; paid $41,000 in cash and signed a three-year note for the balance.

Statement of Financial Position			Income Statement
ASSETS
Current assets:
Cash	-41000		Gross profit
			Operating expenses:
Total current assets	-41000
Building	141000
Total assets	100000		Total operating expenses
LIABILITIES AND SHAREHOLDERS' EQUITY			Earnings from operations
Liabilities
Current liabilities:			Earnings before income taxes
			Net income
Total current liabilities
Notes payable	100000
Total liabilities	100000
Shareholders' Equity			Statement of Retained Earnings
			Beginning balance
Total shareholders' equity
Total liabilities and shareholders' equity	100000		Ending balance

Transaction: Paid cash for equipment that cost $100,000.

Statement of Financial Position			Income Statement
ASSETS
Current assets:
Cash	-100000		Gross profit
			Operating expenses:
Total current assets	-100000
Equipment	100000
Total assets	0		Total operating expenses
LIABILITIES AND SHAREHOLDERS' EQUITY			Earnings from operations
Liabilities
Current liabilities:			Earnings before income taxes
			Net income
Total current liabilities
Total liabilities
Shareholders' Equity			Statement of Retained Earnings
			Beginning balance
Total shareholders' equity
Total liabilities and shareholders' equity	0		Ending balance

Transaction: Purchased supplies for $10,000 on account.

Statement of Financial Position			Income Statement
ASSETS
Current assets:
Supplies	10000		Gross profit
			Operating expenses:
Total current assets	10000
Total assets	10000		Total operating expenses
LIABILITIES AND SHAREHOLDERS' EQUITY			Earnings from operations
Liabilities
Current liabilities:			Earnings before income taxes
Accounts payable	10000
			Net income
Total current liabilities	10000
Total liabilities	10000
Shareholders' Equity			Statement of Retained Earnings
			Beginning balance
Total shareholders' equity
Total liabilities and shareholders' equity	10000		Ending balance