ACCOUNTING-May 15 You contribute your own money to the corporate bank account
You contribute your own money to the corporate bank
You file incorporation papers and pay cash for the fee.
Your Articles of incorporation provide that âFloat Your Boatâ 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.
Acquire office supplies on account
Acquire inventory that includes rafts and equipment on
Rented store space and paid cash for 6 monthsâ rent in
Purchased on account furniture and racks for store. These items are expected to last 5 years
with no residual value
First sale! Sold a
basic raft (no warranty) on account
Paid cash for website and advertising
Bought wood to make paddles that you will sell
Paid cash to lower amount due for previously purchased
Sold rafting equipment on account
Collected cash from account receivables
A customer special ordered and paid cash for 2 paddles
with engravings to match his tattoos. These will be completed and delivered
You realized you have used half of your supplies
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
Borrowed money from the bank at a 6% annual interest rate.
You expect to pay 10% of this off during this year.
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.
Delivered the special order paddles from June 20 and
charged a delivery fee
Customer returned some rafting equipment purchased on June
2nd and you gave them a refund
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
Paid freight to ship the wood for paddles to you
Sold one of the pieces of furniture that was in your store
that you paid $300 for and had purchased on June 1
Declared a dividend
.25 per share
Sold two raft (his and hers) to a couple that just got
married. You gave them a 2% discount.
1,000 before any
Paid the dividend
.25 per share
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.
Cost of items:
June 5 â rafts $300
June 10 – $150
June 20 – $800
July 5 – $700
July 28 – $600 each
Event #4 â Use accounts âRaftsâ and âRaft
Equipmentâ and split the dollar amount equally ($2,500 each account)
Event #13 – $2,000 is for the set of 2 paddles
Event #18 â âFloat Your Boatâ 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)
Event 20 â You received the discount when you
paid for the wood.
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