Required Information [The following information applies to the questions displayed below.] Nicole has decided that she is going to start her business, Nicole's Getaway Spa (NGS). A lot has to be done when starting a new business. Here are some transactions that have occurred prior to April 30. a. Received $94,000 cash when issuing 9,400 new common shares. b. Purchased land by paying $6,500 cash and signing a note payable for $10,500 due in three years. c. Hired a new aesthetician for a salary of $2,400 a month, starting next month. d. NGS purchased a company car for $32,000 cash (list price of $35,000) to assist in running errands for the business. e. Bought and received $850 in supplies for the spa on credit. f. Paid $210 of the amount owed in (e). g. Nicole sold 100 of her own personal shares to Raea Gooding for $900. 3. Prepare a classified balance sheet at April 30 using the information given in the transactions. Include Retained Earnings with a zer balance.

Required Information [The following information applies to the questions displayed below.] Nicole has decided that she is going to start her business, Nicole's Getaway Spa (NGS). A lot has to be done when starting a new business. Here are some transactions that have occurred prior to April 30. a. Received $94,000 cash when issuing 9,400 new common shares. b. Purchased land by paying $6,500 cash and signing a note payable for $10,500 due in three years. c. Hired a new aesthetician for a salary of $2,400 a month, starting next month. d. NGS purchased a company car for $32,000 cash (list price of $35,000) to assist in running errands for the business. e. Bought and received $850 in supplies for the spa on credit. f. Paid $210 of the amount owed in (e). g. Nicole sold 100 of her own personal shares to Raea Gooding for $900. 3. Prepare a classified balance sheet at April 30 using the information given in the transactions. Include Retained Earnings with a zer balance.

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Description: Required Information[The following information applies to the questions displayed below.]Nicole has decided that she is going to start her business, Nicole's Getaway Spa (NGS). A lot has to be done when startinga new business. Here are some transact

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter3: Processing Accounting Information

Section: Chapter Questions

Problem 3.2AP

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Transaction Analysis and Financial Statements Just Rolling Along Inc. was organized on May 1 by two college students who recognized an opportunity to make money while spending their days at a beach along Lake Michigan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations: May 1: Received contribution of $9,000 from each of the two principal owners of the new business in exchange for shares of stock. May 1: Purchased ten bicycles for $300 each on an open account. The company has 30 days to pay for the bicycles. May 5: Registered as a vendor with the city and paid the $15 monthly fee. May 9: Purchased 20 pairs of in-line skates at $125 per pair, 20 helmets at $50 each, and 20 sets of protective gear (knee and elbow pads and wrist guards) at $45 per set for cash. May 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies. May 15: Paid $125 bill from local radio station for advertising for the last two weeks of May. May 17: Customers rented in-line skates and bicycles for cash of $1,800. May 24: Billed the local park district $1,200 for in-line skating lessons provided to neighborhood children. The park district is to pay one-half of the bill within five working days and the rest within 30 days. May 29: Received 50% of the amount billed to the park district. May 30: Customers rented in-line skates and bicycles for cash of $3,000. May 30: Paid wages of $160 to a friend who helped over the weekend. May 31: Paid the balance due on the bicycles. Required Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with the date. Prepare an income statement for the month of May. Prepare a classified balance sheet at May 31. Why do you think the two college students decided to incorporate their business rather than operate it as a partnership?
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