The following events are for Holiday Travel Services for Year 1, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1)The business acquired $50,000 from stock issued to owners.2)Creditors loaned the company $27,500.3)The company provided services to its customers and received $75,400.4)The company paid expenses amounting to $63,250.5)The company purchased land for $25,000.6)The company paid a dividend of $5,500 to its owners.
Required:a)Show the effects of the above transactions on the accounting equation. (Start by using appropriate element and account headings). For those events that affect retained earnings, provide the appropriate account titles in a separate column. Enter a "0" if a transaction does not affect a given account.
b)Prepare an income statement and balance sheet for and as of the end of Year 1.

Question

The following events are for Holiday Travel Services for Year 1, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1)The business acquired $50,000 from stock issued to owners.2)Creditors loaned the company $27,500.3)The company provided services to its customers and received $75,400.4)The company paid expenses amounting to $63,250.5)The company purchased land for $25,000.6)The company paid a dividend of $5,500 to its owners.
Required:a)Show the effects of the above transactions on the accounting equation. (Start by using appropriate element and account headings). For those events that affect retained earnings, provide the appropriate account titles in a separate column. Enter a "0" if a transaction does not affect a given account.
  b)Prepare an income statement and balance sheet for and as of the end of Year 1.

Quizplus · Accepted Answer

The Answer of The following events are for Holiday Travel Services for Year 1, the first year of operations. Assume that all transactions involve the receipt or payment of cash.
1)The business acquired $50,000 from stock issued to owners.2)Creditors loaned the company $27,500.3)The company provided services to its customers and received $75,400.4)The company paid expenses amounting to $63,250.5)The company purchased land for $25,000.6)The company paid a dividend of $5,500 to its owners.
Required:a)Show the effects of the above transactions on the accounting equation. (Start by using appropriate element and account headings). For those events that affect retained earnings, provide the appropriate account titles in a separate column. Enter a "0" if a transaction does not affect a given account.
  b)Prepare an income statement and balance sheet for and as of the end of Year 1.

The Following Events Are for Holiday Travel Services for Year