Nicole has decided that she is going to start her business, Nicole\'s Getaway Sp
ID: 2423188 • Letter: N
Question
Nicole has decided that she is going to start her business, Nicole's Getaway Spa (NGS). A lot has to be done when starting a new business. Here are some transactions that have occurred prior to April 30. a. Received $84,000 cash when issuing 8,400 new common shares. b. Purchased some land by paying $4,000 cash and signing a note payable for $5,500 due in three years. c. Hired a new aesthetician for a salary of $1,400 a month, starting next month. d. NGS purchased a company car for $22,000 cash (list price of $25,000) to assist in running errands for the business. e. Bought and received $950 in supplies for the spa on credit. f. Paid $130 of the amount owed in (e). g. Nicole sold 100 of her own personal shares to Raea Gooding for $700.
Required:
1. Prepare journal entries for each of the entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
2. Assuming that the beginning balances in each of the accounts are zero, complete T-accounts to summarize the transactions (a)–(g).
3. Prepare a classified balance sheet at April 30 using the information given in the transactions. Include Retained Earnings with a zero balance. ( Balance Sheet )
Explanation / Answer
2)
3) Balancesheet
(a) Cash A/c 84,000 To Common Share Capital A/c 84,000 (Being cash received on Issue of 8,400 Common shares) (b) Land A/c 9,500 To Cash A/c 4,000 To Note Payable 5,500 (Being purchase of Land) (c') No Journal Entry Required (d) Car A/c 22,000 To Cash A/c 22,000 (Purchase of Car) (e) Purchase Inventory A/c 950 To Sundry Creditors 950 (Purchase of inventory in Credit) (f) Sundry Creditors 130 To Cash A/c 130 (Paid cash to creditors) (g) No Journal Entry RequiredRelated Questions
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