accounting mba 273139

Britt’s Bike’s began operations in May 2012 and had the following transactions.

a)

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Owner invested $40,000 cash and a truck worth $12,000 in exchange for stock.

b)

Paid rent expense of $8,000.

c)

Purchased $100,000 of bicycle inventory on credit.

d)

Sold bicycles for cash of $169,000. The cost of the bikes sold was $60,000.

e)

Sold and invoiced bicycles to a client for $31,800. The cost of the bikes sold was $16,000.

f)

Bought promotional materials and plane tickets for Tour de France, for $30,000 in cash and recorded the entire amount as advertising expense.

g)

Paid $8,000 in cash for supplies to do bike repairs.

h)

Collected $20,000 from accounts receivable.

i)

Paid for bikes purchased on credit in c above.

j)

Paid cash dividends of $1,000.

k)

Recorded revenue for $2,000 received from customer.

Record each transaction a) through k) in the financial statements effects template on the following page.

Balance Sheet

Income Statement

Transaction

Cash

Asset

+

Noncash Assets

=

Liabil

ities

+

Contrib.

Capital

+

Earned

Capital

Revenues

Expenses

=

Net

Income

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