Chapter 3 for course website

Feb 1 2011 the shop specializes in a selection of

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Unformatted text preview: les Revenue, Cost of Goods Sold (expense), Advertising Expense, Wage Expense, and Repair Expense. All accounts begins with zero balances. 2. Prepare journal entries, and post them to T-accounts. 3. Prepare financial statements at the end of the month ended Feb 28, 2011 (income statement, statement of retained earnings, and balance sheet). Chapter Three Slide 61 of 74 P3-4 Transaction Analysis a. Introduction To Financial Accounting HKUST Received four shareholders' contributed capital of $17,600 cash to form the corporation; issued stock. b. Paid three months' rent for store at $880 per month (prepaid expenses). c. Purchased supplies for $330 cash. d. Purchased and received candy for $5,500 on account, due in 60 days. e. Negotiated and signed a two-year $11,000 loan at the bank. f. Used the money in (e) to purchase a computer for $2,750 (for recordkeeping and inventory tracking) and the balance for furniture and fixtures for the store. g. Placed a grand opening advertisement in the local paper for $500 cash. h. Made sales on Valentine's Day totaling $2,000; $1,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,100. i. Made a $550 payment on accounts payable. j. Incurred and paid employee wages of $450. k. Collected accounts receivable of $55 from customers. l. Made a repair to one of the display cases for $130 cash. m. Made cash sales of $2,200 during the rest of the month. The cost of the candy sold was $1,210. Chapter Three Slide 62 of 74 Focus on Cash Flows Introduction To Financial Accounting HKUST Nature of Operating Activity Cash received from: Customers Investments Cash paid to: Suppliers Employees Interest paid Income taxes paid p Effect on Cash Flows + + - - - - Chapter Three Slide 63 of 74...
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