Question

Transaction Analysis and Financial Statements Blue Jay Delivery Service is incorporated on January 2 and enters...

Transaction Analysis and Financial Statements

Blue Jay Delivery Service is incorporated on January 2 and enters into the following transactions during its first month of operations:

January 2: Filed articles of incorporation with the state and issued 100,000 shares of capital stock. Cash of $100,000 is received from the new owners for the shares.
January 3: Purchased a warehouse and land for $80,000 in cash. An appraiser values the land at $20,000 and the warehouse at $60,000.
January 4: Signed a three-year promissory note at Third State Bank in the amount of $50,000.
January 6: Purchased five new delivery trucks for a total of $45,000 in cash.
January 31: Performed services on account that amounted to $15,900 during the month. Cash amounting to $7,490 was received from customers on account during the month.
January 31: Established an open account at a local service station at the beginning of the month. Purchases of gas and oil during January amounted to $3,230. Blue Jay has until the 10th of the following month to pay its bill.

Required:

1. Complete the below table to summarize the preceding transactions as they affect the accounting equation. Ignore depreciation expense and interest expense. If an account is unaffected by a transaction, enter "0". Use the minus sign to indicate decreases.

Blue Jay Delivery Service
Transactions for the Month of January
Assets = Liabilities + Stockholders' Equity
Date Cash Accounts Receivable Trucks Warehouse Land Accounts Payable Notes Payable Capital Stock Retained Earnings
January 2 $ $ $ $ $ $ $ $ $
January 3
Balance $ $ $ $ $ $ $ $ $
January 4
Balance $ $ $ $ $ $ $ $ $
January 6
Balance $ $ $ $ $ $ $ $ $
January 31-Revenue
Balance $ $ $ $ $ $ $ $ $
January 31-Payment received
Balance $ $ $ $ $ $ $ $ $
January 31-Gas & oil
Balance $ $ $ $ $ $ $ $ $
Total Assets: $ Total Liabilities and Stockholders' Equity: $

2. Prepare an income statement for the month of January.

Blue Jay Delivery Service
Income Statement
For the Month Ended January 31
$
$

3. Prepare a classified balance sheet at January 31.

Blue Jay Delivery Service
Balance Sheet
January 31
Assets
Current assets:
$
Total current assets $
Property, plant, and equipment:
$
Total property, plant, and equipment
Total assets $
Liabilities and Stockholders' Equity
Current liabilities:
$
Long-term debt:
Total liabilities $
$
Total stockholders' equity
Total liabilities and stockholders' equity $

4. Assume that you are considering buying stock in a company. The business signed a three year promissory note at Third State Bank in the amount of $50,000. What additional information you would like to have about this transaction?

  1. What is the interest rate of the loan?
  2. What is the repayment schedule?
  3. What was the interest rate for a similar loan 20 years ago?
  4. Were any assets offered as collateral?

Homework Answers

Answer #1

Question 1 Solution :

Transactions For the month of January for Blue Jay Delivery Service

Amount in ( $ )

Date Cash Account Recivable Truck Warehouse Land Account Payable Note Payable Capital Stock Retained Earning
Jan 2 100,000 0 0 0 100,000 0
Jan 3 0 0 80,000 0 0 0
Jan 4 0 0 0 50,000 0 0
Jan 6 0 45,000 0 0 0 0
Jan 31 15,900 0 0 0 0 0
Jan 31 7,490 0 0 0 0 0
Total 123,390 45,000 80,000 50,000 100,000 0

Total Assets = Liabilities + Stockholder's Equity

= (45000 + 80000+ 50000) + 100000

= 175000 + 100000

Total Assets = $ 275000

  

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During 2022, its first year of operations as a delivery service, Novak Corp. entered into the...
During 2022, its first year of operations as a delivery service, Novak Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $122,000 in cash. 2. Borrowed $48,000 by issuing bonds. 3. Purchased delivery trucks for $52,000 cash. 4. Received $16,000 from customers for services performed. 5. Purchased supplies for $4,700 on account. 6. Paid rent of $5,800. 7. Performed services on account for $11,800. 8. Paid salaries of $26,700. 9. Paid a...
Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transaction were completed...
Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transaction were completed by Interstate Delivery Service during May: 1. Received cash from owner as additional investment, $18,000. 2. Paid advertising expense, $ 4,850. 3. Purchased supplies on account, $2,100. 4. Billed customers for delivery services on account, $14,700. 5. Received cash from customer on account, $8,200. Indicate the effect of each transaction on the accounting equation elements ( Assets, Liabilities, Owner’s Equity, Drawing, Revenue, and Expense)....
Exercise 3-3 During 2017, its first year of operations as a delivery service, Indigo Corporation entered...
Exercise 3-3 During 2017, its first year of operations as a delivery service, Indigo Corporation entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $150,000 in cash. 2. Borrowed $40,000 by issuing bonds. 3. Purchased delivery trucks for $55,000 cash. 4. Received $17,000 from customers for services performed. 5. Purchased supplies for $6,700 on account. 6. Paid rent of $4,200. 7. Performed services on account for $11,700. 8. Paid salaries of $26,800. 9....
Transactions Arrowhead Delivery Service is owned and operated by Gates Deeter. The following selected transactions were...
Transactions Arrowhead Delivery Service is owned and operated by Gates Deeter. The following selected transactions were completed by Arrowhead Delivery Service during August: Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Owner's Equity, Drawing, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $25,000; Owner's Equity (Gates Deeter, Capital) increases by $25,000. Element Item Direction 1....
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were...
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity...
At the end of January 2005 (its first month of operations in the dry cleaning business),...
At the end of January 2005 (its first month of operations in the dry cleaning business), Botkin Corporation was low on cash and needed a loan. The bank requested a balance sheet as of January 31, 2005. The following information was available: Accounts Payable                                                                   $          9,000 Account Receivable                                                                            50,000 Buildings                                                                                             170,000 Land                                                                                                    45,000 Stockholders’ Equity (Owner’s Equity)                                               180,000    Salaries Payable                                                                                 5,000    Equipment                                                                                           39,000    Notes Payable                                                                                    130,000    Cash                                                                                                         ? Required: Prepare a...
A: Prepare a tabular analysis of the transactions. Revenue is called Service Revenue. (If a transaction...
A: Prepare a tabular analysis of the transactions. Revenue is called Service Revenue. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) B: From an analysis of the Retained Earnings columns, compute the net income or net loss for May. (Income Statement) Fredonia Repair Inc. was started on May 1. A summary of May...
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were...
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity...
Missing Amounts From Financial Statements The financial statements at the end of Paradise Realty's first month...
Missing Amounts From Financial Statements The financial statements at the end of Paradise Realty's first month of operations are shown below. PARADISE REALTY Income Statement For the Month Ended November 30, 20Y3 Fees earned $149,300 Operating expenses: Wages expense $ (a) Rent expense 14,400 Supplies expense 12000 Utilities expense 8,100 Miscellaneous expense 4,950     Total operating expenses (69,300) Net income $ (b) PARADISE REALTY Statement of Stockholders' Equity For the Month Ended November 30, 20Y3 Common Stock Retained Earnings Total Balances,...
Missing Amounts From Financial Statements The financial statements at the end of Paradise Realty's first month...
Missing Amounts From Financial Statements The financial statements at the end of Paradise Realty's first month of operations are shown below. PARADISE REALTY Income Statement For the Month Ended November 30, 20Y3 Fees earned $149,300 Operating expenses: Wages expense $ (29,850) Rent expense 14,400 Supplies expense 12000 Utilities expense 8,100 Miscellaneous expense 4,950     Total operating expenses (69,300) Net income $ (80,000) PARADISE REALTY Statement of Stockholders' Equity For the Month Ended November 30, 20Y3 Common Stock Retained Earnings Total Balances,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT