Question

1. Prepare an expanded accounting equation worksheet for the Zeon Company to show the effect of the following transactions on the given dates – our accounting period is January:
   • January 2 Investment of $75,000 in cash into the business by stockholders.
   • January 4 Paid $10,000 in cash toward a building that cost $90,000 with the rest being borrowed from the bank to be paid back in 5 years.
   • January 10 Bought inventory on credit for $4,200
   • January 14 Paid cash wages to employees who worked in January for the business for $2,300.
   • January 21 Sold merchandise for $900 in cash. This merchandise (inventory) originally cost $500.
   • January 30 Received a bill from the utilities company for $600 for utilities used during January that will be due in February.
   • January 31 Paid cash dividends of $300 to stockholders.
2. Prepare the income statement, statement of stockholders equity, balance sheet and cash flow statement for the month of January for Zeon.
3. Prepare an expanded accounting equation worksheet for the Zeon Company for February given what was done in January and the following transactions:
   • February 5 Paid $750 in cash to the bank on the loan borrowed in January and paid $900 in interest on that loan.
   • February 11 Paid the bill from the utilities company from January
   • February 12 Paid the accounts payable associated with the inventory purchased in January.
   • February 18 Sold merchandise to a customer for $1,200 in cash. This merchandise originally cost $750.
   • February 27 Received a bill from the utilities company for $585 for utilities used during February that will be due in March.
   • February 28 Paid cash dividends of $300 to stockholders.
4. Prepare the income statement, statement of stockholders equity, balance sheet and cash flow statement for the month of February for Zeon.

Answer 1