Britt’s Bike’s began operations in May 2012 and had the following transactions.
Owner invested $40,000 cash and a truck worth $12,000 in exchange for stock.
Paid rent expense of $8,000.
Purchased $100,000 of bicycle inventory on credit.
Sold bicycles for cash of $169,000. The cost of the bikes sold was $60,000.
Sold and invoiced bicycles to a client for $31,800. The cost of the bikes sold was $16,000.
Bought promotional materials and plane tickets for Tour de France, for $30,000 in cash and recorded the entire amount as advertising expense.
Paid $8,000 in cash for supplies to do bike repairs.
Collected $20,000 from accounts receivable.
Paid for bikes purchased on credit in c above.
Paid cash dividends of $1,000.
Recorded revenue for $2,000 received from customer.
Required: Record each transaction a) through k) in the financial statements effects template, below.
| |
Balance Sheet
|
Income Statement
|
|
Transaction
|
Cash Asset
|
+
|
Noncash Assets
|
=
|
Liabil-
ities
|
+
|
Contrib. Capital
|
+
|
Earned
Capital
|
Rev-enues
|
–
|
Expen-ses
|
=
|
Net
Income
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|