Fred McCarthy started his company, Cheapo Tours to take customers to the Grand Canyon from Las Vegas. The company began operations in March. The following transactions occurred during the company's first month: March 1 Fred invested $10,000 cash and a van valued at $7,500 in exchange for 50,000 common shares. Paid $1,000 cash to advertise online. March 3 March 5 Purchased equipment on account: $3,000. March 6 March 15 Purchased a second van for $8,000. Paid $2,000 and took the rest as a car loan. Took first tour group to see the Grand Canyon. The trip was a success. Customers paid $1,000 each for their tour. In total, thirteen customers on the tour paid $12,000. One customer was not able to pay, but promised to pay his $1,000 by the end of the month. Joe paid his employees' salaries of $3,000. Purchased fuel for the vehicles: $500 Paid $800 to repair a broken window on one of the vans. Paid for the March 5 equipment purchase. March 16 March 17 March 19 March 20 March 22 Received a utilities bill: $200. Did not pay yet. March 25 Received the last $1,000 from the March 15 tour. March 31 March 31 Took a second tour group of 15 people. Each paid $1,000. Paid employees' salaries of $3,000. March 31 Shareholders took a cash dividend of $5,000. Required: Record all necessary journal entries based on the transactions above.
Fred McCarthy started his company, Cheapo Tours to take customers to the Grand Canyon from Las Vegas. The company began operations in March. The following transactions occurred during the company's first month: March 1 Fred invested $10,000 cash and a van valued at $7,500 in exchange for 50,000 common shares. Paid $1,000 cash to advertise online. March 3 March 5 Purchased equipment on account: $3,000. March 6 March 15 Purchased a second van for $8,000. Paid $2,000 and took the rest as a car loan. Took first tour group to see the Grand Canyon. The trip was a success. Customers paid $1,000 each for their tour. In total, thirteen customers on the tour paid $12,000. One customer was not able to pay, but promised to pay his $1,000 by the end of the month. Joe paid his employees' salaries of $3,000. Purchased fuel for the vehicles: $500 Paid $800 to repair a broken window on one of the vans. Paid for the March 5 equipment purchase. March 16 March 17 March 19 March 20 March 22 Received a utilities bill: $200. Did not pay yet. March 25 Received the last $1,000 from the March 15 tour. March 31 March 31 Took a second tour group of 15 people. Each paid $1,000. Paid employees' salaries of $3,000. March 31 Shareholders took a cash dividend of $5,000. Required: Record all necessary journal entries based on the transactions above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Fred McCarthy started his company, Cheapo Tours to take customers to the Grand Canyon from
Las Vegas. The company began operations in March. The following transactions occurred
during the company's first month:
March 1
Fred invested $10,000 cash and a van valued at $7,500 in exchange for 50,000
common shares.
Paid $1,000 cash to advertise online.
March 3
March 5
Purchased equipment on account: $3,000.
March 6
March 15
Purchased a second van for $8,000. Paid $2,000 and took the rest as a car loan.
Took first tour group to see the Grand Canyon. The trip was a success.
Customers paid $1,000 each for their tour. In total, thirteen customers on the tour
paid $12,000. One customer was not able to pay, but promised to pay his $1,000
by the end of the month.
Joe paid his employees' salaries of $3,000.
Purchased fuel for the vehicles: $500
Paid $800 to repair a broken window on one of the vans.
Paid for the March 5 equipment purchase.
March 16
March 17
March 19
March 20
March 22
Received a utilities bill: $200. Did not pay yet.
March 25
Received the last $1,000 from the March 15 tour.
March 31
March 31
Took a second tour group of 15 people. Each paid $1,000.
Paid employees' salaries of $3,000.
March 31
Shareholders took a cash dividend of $5,000.
Required:
Record all necessary journal entries based on the transactions above.
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