FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to
expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet,
Inc. The following transactions occurred in March:
a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in
accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair value of $13,000, and $1,200 in
supplies, Gave the two owners each 500 shares of common stock with a par value of $1 per share.
b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and
signing a 10-year mortgage note from a local bank for the rest.
c. Borrowed $50,000 from the local bank on a 10 percent, one-year note.
d. Purchased food and paper supplies costing 10,200 in March; paid cash.
e. Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash.
f. Sold food at the retail store for $16,900 cash; the food and paper supplies used cost $10,830. (Hint: Record two the
revenue effect separate from the expense effect.)
g. Received a $420 telephone bill for March to be paid in April.
h. Paid $363 in gas for the van in March.
L. Paid $6,280 in wages to employees who worked in March.
j. Paid a $300 dividend from the corporation to each owner
k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and
decorated the new store for $20,000 (added to the cost of the building); paid cash.
Required:
1. Prepare an unadjusted classified income statement in good form for the north of March.
BOUQUETING](https://content.bartleby.com/qna-images/question/9b01d69a-a5bf-4d2b-9afa-ce1359a5cdb6/9d581206-762a-4794-866c-808efb51b00a/1zoqjmw_processed.jpeg)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to
expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet,
Inc. The following transactions occurred in March:
a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in
accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair value of $13,000, and $1,200 in
supplies, Gave the two owners each 500 shares of common stock with a par value of $1 per share.
b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and
signing a 10-year mortgage note from a local bank for the rest.
c. Borrowed $50,000 from the local bank on a 10 percent, one-year note.
d. Purchased food and paper supplies costing 10,200 in March; paid cash.
e. Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash.
f. Sold food at the retail store for $16,900 cash; the food and paper supplies used cost $10,830. (Hint: Record two the
revenue effect separate from the expense effect.)
g. Received a $420 telephone bill for March to be paid in April.
h. Paid $363 in gas for the van in March.
L. Paid $6,280 in wages to employees who worked in March.
j. Paid a $300 dividend from the corporation to each owner
k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and
decorated the new store for $20,000 (added to the cost of the building); paid cash.
Required:
1. Prepare an unadjusted classified income statement in good form for the north of March.
BOUQUETING
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