Kamas and G. Charrier 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, Incorporated. The following transactions occurred in March: Received $96,000 cash from each of the two shareholders to form the corporation, in addition to $3,600 in accounts receivable, $8,500 in equipment, a van (equipment) appraised at a fair value of $16,200, and $2,000 in supplies. Gave the two owners each 820 shares of common stock with a par value of $1 per share. Purchased a vacant store for sale in a good location for $520,000, making a $104,000 cash down payment and signing a 10-year mortgage note from a local bank for the rest. Borrowed $66,000 from the local bank on a 10 percent, one-year note. Purchased food and paper supplies costing $13,400 in March; paid cash. Catered four parties in March for $5,800; $1,920 was billed and the rest was received in cash. Sold food at the retail store for $17,700 cash. Used food and paper supplies costing $11,150. Received a $580 telephone bill for March to be paid in April. Paid $523 in gas for the van in March. Paid $9,480 in wages to employees who worked in March. Paid a $460 dividend from the corporation to each owner. Purchased $66,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $28,000 (added to the cost of the building); paid cash. Prepare an unadjusted classified income statement for the month of March

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 14P

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J. Kamas and G. Charrier 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, Incorporated. The following transactions occurred in March:

Received $96,000 cash from each of the two shareholders to form the corporation, in addition to $3,600 in accounts receivable, $8,500 in equipment, a van (equipment) appraised at a fair value of $16,200, and $2,000 in supplies. Gave the two owners each 820 shares of common stock with a par value of $1 per share.
Purchased a vacant store for sale in a good location for $520,000, making a $104,000 cash down payment and signing a 10-year mortgage note from a local bank for the rest.
Borrowed $66,000 from the local bank on a 10 percent, one-year note.
Purchased food and paper supplies costing $13,400 in March; paid cash.
Catered four parties in March for $5,800; $1,920 was billed and the rest was received in cash.
Sold food at the retail store for $17,700 cash.
Used food and paper supplies costing $11,150.
Received a $580 telephone bill for March to be paid in April.
Paid $523 in gas for the van in March.
Paid $9,480 in wages to employees who worked in March.
Paid a $460 dividend from the corporation to each owner.
Purchased $66,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $28,000 (added to the cost of the building); paid cash.

Prepare an unadjusted classified income statement for the month of March.

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