Accounting Jeff Andringa, a former university hockey player, started Ice Camp Ltd., a hockey camp for children from ages6 to 16. Eventually he would like to expand and open hockey camps across the country. Jeff has asked you to help him prepare financial statements at the end of his first year of operations. He tells you the following facts about his business activities. In order to get the business off the ground, he decided to incorporate. On January 3, 2018, he incorporated Ice Camp Ltd. paying $5,000 in exchange for 500 common shares. The company subsequently borrowed $10,000 from a local bank. A used bus for transporting kids was purchased for $12,000 cash. Hockey nets and other miscellaneous equipment were purchased with $1,500 cash. The company earned camp tuition of $100,000 during the year but has collected only $90,000 of this amount far. Thus, at the end of the year the company was still owed $10,000 by some of its clients. The company rents time at a local rink. Total ice rental costs during the year were $14,000, insurance was $6,000, salaries were $20,000, and administrative expenses totaled $7,000—all of which were paid in cash. The company incurred $800 in interest expense on the bank loan, which it still owed at the end of the year. The company also owes $10,440 in income tax. The company paid Jeff dividends of $35,000 rather than salary during the year. Required: What would be the balance in the corporate bank account at December 31, 2018?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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profile-image Time remaining: 00 : 09 : 41 Accounting Jeff Andringa, a former university hockey player, started Ice Camp Ltd., a hockey camp for children from ages6 to 16. Eventually he would like to expand and open hockey camps across the country. Jeff has asked you to help him prepare financial statements at the end of his first year of operations. He tells you the following facts about his business activities. In order to get the business off the ground, he decided to incorporate. On January 3, 2018, he incorporated Ice Camp Ltd. paying $5,000 in exchange for 500 common shares. The company subsequently borrowed $10,000 from a local bank. A used bus for transporting kids was purchased for $12,000 cash. Hockey nets and other miscellaneous equipment were purchased with $1,500 cash. The company earned camp tuition of $100,000 during the year but has collected only $90,000 of this amount far. Thus, at the end of the year the company was still owed $10,000 by some of its clients. The company rents time at a local rink. Total ice rental costs during the year were $14,000, insurance was $6,000, salaries were $20,000, and administrative expenses totaled $7,000—all of which were paid in cash. The company incurred $800 in interest expense on the bank loan, which it still owed at the end of the year. The company also owes $10,440 in income tax. The company paid Jeff dividends of $35,000 rather than salary during the year. Required: What would be the balance in the corporate bank account at December 31, 2018?

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