In: Accounting
The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow.
Required:
Assets | = | Liabilities | + | Stockholders' Equity | ||||||||||||||
Accounts | Merchandise | Notes | Accounts | Paid-in | Retained | |||||||||||||
Cash | + | Receivable | + | Inventory | + | Equipment | = | Payable | + | Payable | + | Capital | + | Earnings | Revenue | - | Expenses | |
a. | 8700 | + | + | + | = | + | + | 8700 | + | - | ||||||||
b. | 5500 | + | + | + | = | 5500 | + | + | + | - | ||||||||
c. | -1750 | + | + | + | 1940 | = | + | + | + | 190 | 190 | - | ||||||
d. | -1400 | + | + | + | = | + | + | + | -1400 | - | 1400 | |||||||
e. | -8200 | + | + | 16000 | + | = | + | 7800 | + | + | - | |||||||
f. | 5800 | + | + | -3900 | + | = | + | + | + | 1900 | 5800 | - | 3900 | |||||
g. | + | + | + | = | + | 120 | + | + | -120 | - | 120 | |||||||
h. | -1350 | + | + | 4250 | + | = | + | 2900 | + | + | - | |||||||
i. | 4650 | + | 9100 | + | -9200 | + | = | + | + | + | 4550 | 13750 | - | 9200 | ||||
j. | + | + | + | = | + | 2000 | + | + | -2000 | - | 2000 | |||||||
k. | 3450 | + | -3450 | + | + | = | + | + | + | - | ||||||||
l. | -4900 | + | + | + | = | + | -4900 | + | + | - | ||||||||
Bal. | 10500 | + | 5650 | + | 7150 | + | 1940 | = | 5500 | + | 7920 | + | 8700 | + | 3120 | 19740 | - | 16620 |
b.
Assets | 25240 |
Liabilities | 13420 |
Stockholders' Equity | 11820 |
Net Income | 3120 |
c.
BLUE CO. STORES, INC. | |
Income Statement | |
Sales revenue | 19550 |
Cost of goods sold | - 13100 |
Gross margin | 6450 |
Rent expense | -1400 |
Wages expense | -2000 |
Advertising expense | -120 |
other income | 190 |
Net income $ | 3120 |
d.
BLUE CO. STORES, INC. | |
Balance Sheet | |
Assets: | |
Cash | 10500 |
Accounts receivable | 5650 |
Merchandise inventory | 7150 |
Total current assets | 23300 |
Equipment | 1940 |
Total assets | 25240 |
Liabilities: | |
Notes payable | 5500 |
Accounts payable | 7920 |
Total liabilities | 13420 |
Stockholders' Equity: | |
Common stock | 8700 |
Retained earnings | 3120 |
Total stockholders' equity | 11820 |
Total liabilities and stockholders' equity | 25240 |