Question

BradBrad

CarterCarter

started a mobile DJ business named

Party WheelsParty Wheels?,

?Inc., on

AprilApril

?1,

20162016.

In the month of

AprilApril?,

prior to providing services to? customers, the business incurred six transactions which have been posted to the accounts as?follows:

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?(Click the icon to view the? accounts.)Read the requirements

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.

Requirement 1. Based on the? accounts, create the journal entries that resulted from the six transactions. Include explanations with each journal entry. ?(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(1)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(2)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(3)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(4)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(5)

Journal Entry
Date		Accounts and Explanations	Debit	Credit
(6)

Requirement 2. Calculate the ending balance in each account. Enter the? amount, along with a? "Bal" reference on the appropriate side of each? T-account.

Cash					Supplies					Equipment					Building
(1)	30,000	(4)	2,000		(2)	1,200				(4)	2,000				(3)	120,000
		(5)	2,000
		(6)	400
Accounts payable					Notes payable					Common stock
(6)	400	(2)	1,200		(5)	2,000	(3)	120,000				(1)	30,000

Requirement 3. Prepare the trial balance for

Party WheelsParty Wheels?,

?Inc., at

AprilApril

?30,

20162016.

Party Wheels, Inc.
Trial Balance
April 30, 2016
	Account	Debit	Credit
	Total

Requirement 4. Prepare a balance sheet for

Party WheelsParty Wheels?,

?Inc., as of

AprilApril

?30,

20162016.

First complete the asset portion of the? statement, and then complete the liabilities and? stockholders' equity sections of the statement. ?(If a box is not used in the? statement, leave the box? empty; do not select a label or enter a? zero.)

	Party Wheels, Inc.
	Balance Sheet
	April 30, 2016

	Assets
	Total assets

	Liabilities
	Total liabilities
	Stockholders' Equity
	Total liabilities and stockholders' equity

Answer 1

• All working forms part of the answer
• Requirement 1

Journal Entry
Date	Accounts and Explanations	Debit	Credit
1	Cash	$                     30,000.00
	Common Stock		$                        30,000.00
	(common stock issued and acash received)
Journal Entry
Date	Accounts and Explanations	Debit	Credit
2	Supplies	$                       1,200.00
	Accounts Payable		$                          1,200.00
	(Supplies purchased on account)
Journal Entry
Date	Accounts and Explanations	Debit	Credit
3	Building	$                   120,000.00
	Notes Payable		$                     120,000.00
	(Building purchased and notes payable issued against purchase)
Journal Entry
Date	Accounts and Explanations	Debit	Credit
4	Equipment	$                       2,000.00
	Cash		$                          2,000.00
	(Equipment purchased for cash)
Journal Entry
Date	Accounts and Explanations	Debit	Credit
5	Notes Payable	$                       2,000.00
	Cash		$                          2,000.00
	(Notes payable paid in cash)
Journal Entry
Date	Accounts and Explanations	Debit	Credit
6	Accounts Payable	$                           400.00
	Cash		$                              400.00
	(Cash paid to accounts payable)

• Requirement 2

Cash					Supplies					Equipment					Building
1	$               30,000.00	4	$                          2,000.00		2	$                        1,200.00	Bal	$           1,200.00		4	$            2,000.00	Bal	$      2,000.00		3	$       120,000.00	Bal	$   120,000.00
		5	$                          2,000.00
		6	$                              400.00
		Bal	$                        25,600.00
Total	$               30,000.00	Total	$                        30,000.00		Total	$                        1,200.00	Total	$           1,200.00		Total	$            2,000.00	Total	$      2,000.00		Total	$       120,000.00	Total	$   120,000.00

Accounts payable					Notes payable					Common stock
6	$                     400.00	2	$                          1,200.00		5	$                        2,000.00	3	$      120,000.00		Bal	$          30,000.00	1	$    30,000.00
Bal	$                     800.00				Bal	$                   118,000.00
TOtal	$                 1,200.00	TOtal	$                          1,200.00		TOtal	$                   120,000.00	TOtal	$      120,000.00		TOtal	$          30,000.00	TOtal	$    30,000.00

• Requirement 3

Party Wheels, Inc.
Trial Balance
April 30, 2016
	Account	Debit	Credit
	Cash	$                     25,600.00
	Supplies	$                       1,200.00
	Equipment	$                       2,000.00
	Building	$                   120,000.00
	Accounts payable		$                              800.00
	Notes payable		$                     118,000.00
	Common stock		$                        30,000.00
	Total	$             148,800.00	$               148,800.00

• Requirement 4

Party Wheels, Inc.
Balance Sheet
April 30, 2016
Assets
Cash	$        25,600.00
Supplies	$           1,200.00
Equipment	$           2,000.00
Building	$      120,000.00
Total assets	$      148,800.00
Liabilities
Accounts payable	$              800.00
Notes payable	$      118,000.00
Total liabilities	$      118,800.00
Stockholders' Equity
Common stock	$       30,000.00
Total liabilities and stockholders' equity	$      148,800.00