The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow. a. The firm was organized and the stockholders invested cash of $16,000. b. The firm borrowed $10,000 from the bank; a short-term note was signed. c. Display cases and other store equipment costing $3,500 were purchased for cash. The original list price of the equipment was $3,800, but a discount was received because the seller was having a sale. d. A store location was rented, and $2,800 was paid for the first month's rent. Return e. Inventory of $30,000 was purchased; $18,000 cash was paid to the suppliers, and the balance will be paid within 30 days. f. During the first week of operations, merchandise that had cost $8,000 was sold for $13,000 cash. g. A newspaper ad costing $200 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month. h. Additional inventory costing $8,400 was purchased; cash of $2,400 was paid, and the balance is due in 30 days. i. In the last three weeks of the first month, sales totaled $27,000, of which $19,200 was sold on account. The cost of the goods sola totaled $18,000. j. Employee wages for the month totaled $3,700; these will be paid during the first week of the next month. k. The firm collected a total of $6,320 from the sales on account recorded in transaction i. I. The firm paid a total of $9,440 of the amount owed to suppliers from transaction e.
The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow. a. The firm was organized and the stockholders invested cash of $16,000. b. The firm borrowed $10,000 from the bank; a short-term note was signed. c. Display cases and other store equipment costing $3,500 were purchased for cash. The original list price of the equipment was $3,800, but a discount was received because the seller was having a sale. d. A store location was rented, and $2,800 was paid for the first month's rent. Return e. Inventory of $30,000 was purchased; $18,000 cash was paid to the suppliers, and the balance will be paid within 30 days. f. During the first week of operations, merchandise that had cost $8,000 was sold for $13,000 cash. g. A newspaper ad costing $200 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month. h. Additional inventory costing $8,400 was purchased; cash of $2,400 was paid, and the balance is due in 30 days. i. In the last three weeks of the first month, sales totaled $27,000, of which $19,200 was sold on account. The cost of the goods sola totaled $18,000. j. Employee wages for the month totaled $3,700; these will be paid during the first week of the next month. k. The firm collected a total of $6,320 from the sales on account recorded in transaction i. I. The firm paid a total of $9,440 of the amount owed to suppliers from transaction e.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Total assets
BLUE CO. STORES INC.
Balance Sheet
Total current assets
Total liabilities
Assets:
Liabilities:
Stockholders' Fauity:
$
69
69
$
0
0
0
Transcribed Image Text:The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow.
a. The firm was organized and the stockholders invested cash of $16,000.
b. The firm borrowed $10,000 from the bank; a short-term note was signed.
c. Display cases and other store equipment costing $3,500 were purchased for cash. The original list price of the equipment was
$3,800, but a discount was received because the seller was having a sale.
d. A store location was rented, and $2,800 was paid for the first month's rent.
e. Inventory of $30,000 was purchased; $18,000 cash was paid to the suppliers, and the balance will be paid within 30 days.
f. During the first week of operations, merchandise that had cost $8,000 was sold for $13,000 cash.
Return t
g. A newspaper ad costing $200 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in
the next month.
h. Additional inventory costing $8,400 was purchased; cash of $2,400 was paid, and the balance is due in 30 days.
i. In the last three weeks of the first month, sales totaled $27,000, of which $19,200 was sold on account. The cost of the goods sold
totaled $18,000.
j. Employee wages for the month totaled $3,700; these will be paid during the first week of the next month.
k. The firm collected a total of $6,320 from the sales on account recorded in transaction i.
1. The firm paid a total of $9,440 of the amount owed to suppliers from transaction e.
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A balance sheet is an accounting report that shows a corporation's assets liabilities, and stockholders' equity at a given moment in time, as well as providing a basis for calculating rates of return and assessing its capital structure.
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