ACCOUNTING-May 15 You contribute your own money to the corporate bank account

QUESTION

Event

Date

Event

Amount

1

May 15

You contribute your own money to the corporate bank
account

100,000

2

May 15

You file incorporation papers and pay cash for the fee.
Your Articles of incorporation provide that “Float Your Boat” authorize (can
issue) 1,000 shares of common stock (par value $1 per share). You own 100% of
these via your contribution made on the same day.

100

3

May 21

Acquire office supplies on account

900

4

May 22

Acquire inventory that includes rafts and equipment on
account

5,000

5

June 1

Rented store space and paid cash for 6 months’ rent in
advance

18,000

6

June 1

Purchased on account furniture and racks for store. These items are expected to last 5 years
with no residual value

20,000

7

June 5

First sale! Sold a
basic raft (no warranty) on account

600

8

June 5

Paid cash for website and advertising

400

9

June 6

Bought wood to make paddles that you will sell

200

10

June 10

Paid cash to lower amount due for previously purchased
office supplies

300

11

June 10

Sold rafting equipment on account

400

12

June 11

Collected cash from account receivables

200

13

June 20

A customer special ordered and paid cash for 2 paddles
with engravings to match his tattoos. These will be completed and delivered
mid-July

2,000

14

June 30

You realized you have used half of your supplies

450

15

July 1

Hired a sales person for the store and gave them a hiring
bonus. The salary is 2,000 a month, paid monthly on the last day of each
month

500

16

July 1

Borrowed money from the bank at a 6% annual interest rate.
You expect to pay 10% of this off during this year.

100,000

17

July 5

Sold a high-end raft that comes with a 5 year warranty.
You expect that claims will come in each year that equals 1% of the selling
price of rafts that come with the warranty.

1,500

18

July 10

Delivered the special order paddles from June 20 and
charged a delivery fee

50

19

July 15

Customer returned some rafting equipment purchased on June
2nd and you gave them a refund

80

20

July 15

Bought more wood for paddles with the terms of 2/10, n/30
and you pay for them the same day with cash

800 before any
discount

21

July 15

Paid freight to ship the wood for paddles to you
(freight-in)

60

22

July 20

Sold one of the pieces of furniture that was in your store
that you paid $300 for and had purchased on June 1

200

23

July 22

Declared a dividend

.25 per share

24

July 28

Sold two raft (his and hers) to a couple that just got
married. You gave them a 2% discount.

1,000 before any
discount

25

July 30

Paid the dividend

.25 per share

Supplement
1.
Remember that Income Statement accounts impact
the balance sheet through Retained Earnings. This can be accomplished by
creating closing entries for the income statement account balances (income and
expenses) after the income statement is prepared.
2.
Cost of items:
a.
June 5 – rafts $300
b.
June 10 – $150
c.
June 20 – $800
d.
July 5 – $700
e.
July 28 – $600 each
3.
Event #4 – Use accounts “Rafts” and “Raft
Equipment” and split the dollar amount equally ($2,500 each account)
4.
Event #13 – $2,000 is for the set of 2 paddles
5.
Event #18 – “Float Your Boat” charged the
delivery fee. No third party like UPS was used. The customer paid cash for the
delivery fee of $50. (If you had them charge this on account, that is ok too)
6.
Event 20 – You received the discount when you
paid for the wood.

 

ANSWER:

REQUEST HELP FROM A TUTOR