Candro corp. began operations on May 1,2010 and completed the following transactions (A+ Guaranteed)

Candro corp. began operations on May 1,2010 and completed the following transactions during its first month of operations:

Sold capital stock for $30,000

Purchased land and a building valued at $35,000 and $165,000, respectively, by paying $10,000 cash and signing a 20 year mortgage for the balance.

Purchased office equipment on account , $7,500

Billed a customer for services performed , $5,000

Received an $800 deposit from a customer for services to be performed next month

Made a partial payment on account for the office equipment purchased in transaction (C),$1,500

Performed a service and immediately collected $2,000

Received and immediately paid the telephone bill for the month, $380.

Paid a dividend to owners, $3,000

Received but did not pay, the monthly utility bill, $450

Question:

A)Determine the effect of each of the preceding events on the accounting equation

B)Prepare the general journal entries to record each of these events. You may set up T accounts to keep track of some accounts. Do not prepare adjusting entries!

C)Prepare the income statement for the period

D)Prepare the statement of retained earnings for the period

Here’s the SOLUTION

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