Question

ABC Inc builds and sells single-family homes. The company had the following transactions during Q1 2016 period that ended on March 31, 2016:

Purchased a single-family home on January 10, 2016 which it plans to renovate and resell. The home was purchased for $200,000 cash.

Purchased $5,000 worth of building materials at Home Depot to be used in the renovation. The purchased was paid with cash.

Hired a contractor to perform the renovation of the house. The renovation was completed on February 10, 2016 and the contractor billed ABC Inc $10,000 for this renovation. The amount was not paid as at the end of Q1 2016.

Purchased general office supplies of $1,000 cash during Q1 2016.

Sold the home for $300,000 cash on March 30^th 2016.

At the beginning of the quarter (1/1/16), ABC Inc Balance Sheet has only $300,000 in Cash and $300,000 in Owners’ Equity.

Create a transaction table for the above events (remember you must include the accounts you debit and credit).

Create ABC Inc Balance Sheet at the end of Q1 2016.

Answer 1

1) Transaction Table

Transaction	Assets					Capital +Liability
	Cash	Material	Renovaton Charge	Office Supply	Family Home	Owners Equity	Creditors
Opening Cash Balance & Owners Equity	+300000					+300000
Purchase of Single Family home by Cash	-200000				+200000
Purchase of building material by cash	-5000	+5000
Renovation charges to contractor			+10000				+10000
Purchase of general office supplies by Cash	-1000			+1000
Sale of Home by Cash	+300000				-200000	+100000
TOTAL	3,94,000	5,000	10,000	1,000	-	4,00,000	10,000

ABC INC
BALANCE SHEET
AS AT MARCH 31ST, 2016
Assets	$	Liabilities & Owners Equity	$
Current Asset		Liabilities
Cash	$3,94,000	Creditors	$10,000
Office Supply	$1,000
Total Current Assets	$3,95,000	Total Current Liability	$10,000
		Stock Holders Equity           300000
		Retained Earnings                  85000	$3,85,000
Total Assets	$3,95,000	Total Liabilities & Owners Equity	$3,95,000