Question

MC LUT [The following information applies to the questions displayed below.) Bennett Griffin and Chula Garza organized Cole Valley Book Store as a corporation; each contributed $70,800 cash to start the business and received 5,100 shares of common stock. The store completed its first year of operations on December 31, current year. On that date, the following financial items for the year were determined: December 31, current year, cash on hand and in the bank, $69,550: December 31, current year, amounts due from customers from sales of books, $39,500; unused portion of store and office equipment, $75,000: December 31, current year, amounts owed to publishers for books purchased, $12,300; one-year note payable to a local bank for $3,600. No dividends were declared or paid to the stockholders during the year. E1-5 Part 1 Required: 1. Complete the following balance sheet as of the end of current year. Some information has been given below. COLE VALLEY BOOK STORE Balance Sheet Assets Cash Accounts receivable Store and office equipment 170 Liabilities Accounts payable Note payable Interest payable Total liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 26,380 Total assets

Answer 1

Q1. Assets: Cash Accounts Receivable Stores and Equipment Cole Valley Book Store Balance sheet At December 31, Current Year Liabilites $ 69,550 Accounts Payable $ 39,500 Notes Payable $ 75,000 Interest Payable Total Liabilities Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' equity $ 184,050 Total Liabilities and Stockholders' Equity $ 12,300 $ 3,600 $ 170 $ 16,070 $ 141,600 $ 26,380 $ 167,980 $184,050 Total Assets Q2. *Common Stock= [$70,800*2]= $141,600 *Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings. >$0+ Net Income - $ 0 = $ 26,380 Net Income = $ 26,380 *Accounts Receivable - amount due from customers from sales of books; *Account Payable- amounts owed to publishers for books purchased.

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