At the beginning of 2016. Better Corp\'s accounting records had the following ge

Question

At the beginning of 2016. Better Corp's accounting records had the following general ledger accounts balances. Better Corp. completed the following transactions during 2016: Purchased land for $5,000 cash. Acquired $25,000 cash from the issue of common stock. Received $75.000cash for providing services to customers. Paid cash operating expenses of $42.000. Borrowed $10.000 cash from the bank. Paid a $5,000 cash dividend to the stockholders. Determined that the market value of the lend purchased even, 1 is $35,000.

Explanation / Answer

Profit and loss statement Direct Income for service rendered 75000 Less : Operating Exp -42000 Less : Dividend -5000 Trf to Retained Earning 28000 Balance Sheet = Accounting Equation Assets Liabilities Cash Land = Payable Bank Borrowing Stock Retained Earning Balance 68000 25000 12000 10000 32000 39000 Land 01-01-2016 Op Balance 20000 2016 Cash 5000 2016 Cl. Balance 25000 25000 25000 Stock 01-01-2016 Op Bal 7000 2016 Cl. Balance 32000 2016 cash 25000 32000 32000 Cash 01-01-2016 Op Balance 10000 2016 Land 5000 2016 Stock 25000 2016 Operating Exp 42000 2016 Income for Service 75000 2016 dividend 5000 2016 Bank 10000 2016 Cl.Balance 68000 120000 120000 Income Account for service rendered 2016 Profit and loss 75000 Operating Expesnes 2016 cash 42000 Bank borrowing 2016 cash 10000 Dividend 2016 cash 5000

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