\"font-family:Helvetica;margin-right:0px;margin-bottom:0px;margin-left:0px;paddi

ID: 2372525 • Letter: #

Question

"font-family:Helvetica;margin-right:0px;margin-bottom:0px;margin-left:0px;padding:20px 0px 0px;font-size:14px;font-style:italic;text-align:left;color:rgb(51,51,51);">

E4-2 Record transactions and calculate financial statement amounts

[L O 2, 6, 7]

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px 0px 0px .15in;padding:0px;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

The following are the transactions relating to the formation of

Cardinal Mowing Services, Inc., and its first month of

operations.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

The firm was organized and the owners invested cash of $480.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

The company borrowed $720 from a relative of the owners; a

short-term note was signed.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

Two lawn mowers costing $384 each and a trimmer costing $104 were

purchased for cash. The original list price of each mower was $488,

but a discount was received because the seller was having a

sale.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

Gasoline, oil, and several packages of trash bags were purchased

for cash of $72.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

Advertising flyers announcing the formation of the business and a

newspaper ad were purchased. The cost of these items, $136, will be

paid in 30 days.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

During the first two weeks of operations, 47 lawns were mowed. The

total revenue for this work was $564; $372 was collected in cash

and the balance will be received within 30 days.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

Employees were paid $336 for their work during the first two

weeks.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

Additional gasoline, oil, and trash bags costing $88 were purchased

for cash.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

In the last two weeks of the first month, revenues totaled $736, of

which $300 was collected.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

Employee wages for the last two weeks totaled $408; these will be

paid during the first week of the next month.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

It was determined that at the end of the month the cost of the

gasoline, oil, and trash bags still on hand was $24.

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

Customers paid a total of $120 due from mowing services provided

during the first two weeks. The revenue for these services was

recognized in transaction

"margin:0px;padding:0px;">f

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

Required:

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:top;">

(a)

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:left;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;text-align:justify;">

Record each transaction in the appropriate columns.

"margin:0px;padding:0px;color:#FF0000;">

"margin:0px;padding:0px;"> (Negative amounts should be

indicated by a minus sign. Enter the total of the expense column as

a positive amount. Leave no cells blank - be certain to enter "0"

wherever required. Omit the "$" signs in your

response.)

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;">

Assets

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;">

Liabilities

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:middle;">

"margin-right:0px;margin-bottom:0px;margin-left:0px;padding:0px;">

Owners' Equity

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Transaction

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Cash

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Accounts Receivable

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Supplies

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Equipment

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Notes Payable

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Accounts Payable

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Paid-in Capital

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Retained earnings

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Revenues

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:bottom;">

Expenses

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:center;vertical-align:middle;">

"font-family:Arial, Verdana, Helvetica, 'Arial Unicode MS';margin:0px;padding:0px;text-align:right;vertical-align:middle;">