Question

During March, the business completed the following transactions:

1- Issued common shares for $ 8000 cash

2. Borrowed $42,000 from the bank, with Calderon signing a note payable in the name of the business.

3. Paid cash of $39,000 to a real estate company to acquire land.

4. Performed service for a customer and received cash of $20,000.

5. Purchased supplies on credit, $500.

6. Performed customer service and earned revenue on account, $3500.

7. Paid the following cash expenses: salaries, $2300; rent, $1,800; and interest, $600.

8. Received $1,500 on account.

9. Received a $700 utility bill that will be paid next month.

10. Declared and paid dividend of $1700.

Prepare for March: Accounting equation, trial balance, Net income ,retained earnings, Balance sheet.

Answer 1

Answer:

Requirement 1: Accounting Equation showing effect of March events: Stockholder's Equity Assets Land Supplies Accounts Receivable Liabilities Notes Payable Accounts Payable Cash Common Stock $8,000 March 1 March 2 March 3 $ $ $ 8,000 42,000 (39,000) $42,000 $ 39,000 $ 20,000 Service Revenue $20,000 $ 500 $500 March 4 March 5 March 6 March 7 $ 3,500 $ (4,700) Service Revenue Salaries Expense Rent Expense Interest $3,500 -$2,300 -$1,800 -$600 March 8 $ 1,500 $ (1,500) March 9 March 10 $700 Utility Expense Dividend -$7001 -$1,700 $ (1,700) Total $ 26,100 $ 39,000 $500 $ 2,000 $ 42,000 $ 1,200 $ 24,400

Requirement 2: Trial Balance Credit Debit $ 26,100 $ 39,000 $ 500 $ 2,000 Account Cash Land Supplies Accounts Receivable Notes Payable Accounts Payable Common Stock Service Revenue Salaries Expense Rent Expense Interest Utility Expense Dividend Total $ 42,000 $ 1,200 $ 8,000 $ 23,500 2,300 1,800 600 $ $ $ $ $ $ 700 1,700 74,700 $ 74,700

Requirement 3: Net income for March $ 23,500 Service Revenue Less: Salaries Expense Rent Expense Interest Utility Expense Net Income $ $ $ $ $ 2,300 1,800 600 700 18,100 Requirement 4: Retained Earnings: Net Income Less Dividend Paid Retained Earnings $18,100 $1,700 $16,400

$ Balance Sheet As at end of March Assets Current Assets Cash Accounts Receivable Supplies Total current assets Fixed (Long-Term) Assets Land Total fixed assets 26.100 2,000 500 28,600 $ 39.000 39,000 $ $ 67,600 Total Assets Liabilities and Owner's Equity Current Liabilities Accounts payable Total current liabilities Non Current Liabilities Notes payable Long term debt Total Non current liabilities 1,200 1,200 $ 42,000 $ 42,000 Total liabilities S 43,200 Owner's Equity Common Stock Retained earnings Total owner's equity 8,000 16,400 24,400 $ Total Liabilities and Owner's Equity $ 67,600