The following events are for Leisure Travel Services for the year 2013, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1) The business acquired $40,000 from stock issued to owners.
2) Creditors loaned the company $17,500.
3) The company provided services to its customers and received $55,400.
4) The company paid expenses amounting to $43,250.
5) The company purchased land for $29,000.
6) The company paid a dividend of $5,000 to its owners.
Required:
a) Show the effects of the above transactions on the accounting equation (use appropriate element and account headings). For those events that affect retained earnings, indicate in a separate column the appropriate temporary account. b) Prepare an income statement and balance sheet for the year 2013.

Question

The following events are for Leisure Travel Services for the year 2013, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1) The business acquired $40,000 from stock issued to owners.
2) Creditors loaned the company $17,500.
3) The company provided services to its customers and received $55,400.
4) The company paid expenses amounting to $43,250.
5) The company purchased land for $29,000.
6) The company paid a dividend of $5,000 to its owners.
Required:
a) Show the effects of the above transactions on the accounting equation (use appropriate element and account headings). For those events that affect retained earnings, indicate in a separate column the appropriate temporary account.  b) Prepare an income statement and balance sheet for the year 2013.

Quizplus · Accepted Answer

The Answer of The following events are for Leisure Travel Services for the year 2013, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1) The business acquired $40,000 from stock issued to owners.
2) Creditors loaned the company $17,500.
3) The company provided services to its customers and received $55,400.
4) The company paid expenses amounting to $43,250.
5) The company purchased land for $29,000.
6) The company paid a dividend of $5,000 to its owners.
Required:
a) Show the effects of the above transactions on the accounting equation (use appropriate element and account headings). For those events that affect retained earnings, indicate in a separate column the appropriate temporary account.  b) Prepare an income statement and balance sheet for the year 2013.

The Following Events Are for Leisure Travel Services for the Year