Question

Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March: a. Received $102,000 cash from each of the two shareholders to form the corporation, in addition to $4,200 in accounts receivable, $9,700 in equipment, a van (equipment) appraised at a fair value of $17,400, and $2,300 in supplies. Gave the two owners each 940 shares of common stock with a par value of $1 per share. b. Purchased a vacant store for sale in a good location for $580,000, making a $116,000 cash down payment and signing a 10-year mortgage note from a local bank for the rest. c. Borrowed $72,000 from the local bank on a 10 percent, one-year note. d. Purchased food and paper supplies costing $14,600 in March; paid cash. e. Catered four parties in March for $6,400; $2,040 was billed and the rest was received in cash. f. Sold food at the retail store for $18,000 cash; the food and paper supplies used cost $11,270. (Hint: Record the revenue effect separate from the expense effect.) g. Received a $640 telephone bill for March to be paid in April. h. Paid $583 in gas for the van in March. i. Paid $10,680 in wages to employees who worked in March j. Paid a $520 dividend from the corporation to each owner. k. Purchased $72,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $31,000 (added to the cost of the building); paid cash.

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Answer 1

Missing figures highlighted in yellow:

Credit Date Date Credit Date Credit Travelling Gourmet Inc. T Accounts Date Debit Date Cash Beg bal $ - (a) $ 204,000 (6) $ 72,000 (d) $ 4,360 (h) $ 18,000 (0) Debit Date Credit Accounts Receivable $ - $ 4,200 $ 2,040 Beg bal Beg bal (a) Debit Date Supplies $ $ 2,300 $ 14,600 Beg bal Debit Date Equipment $ - $ 27,100 $ 72,000 (d) $ 11,270 $ 116,000 $ 14,600 $ 583 $ 10,680 $ 1,040 $ 103,000 (k) Bal Bal. Bal. Bal. $ 52,457 Building $ - $580,000 $ 31,000 $ 6,240 Accounts Payable Beg bal (g) $ 5,630 Notes Payable Beg bal $ 99,100 Mortgage Payable Beg bal Beg bal (b) (k) $ $ . 640 $- $ 72,000 $ - $ 464,000 (c)' (b) Bal. Bal. $72,000 $ 464,000 $ 611,000 Common Stock Beg bal (a) $ 640 Additional Paid in Capital Beg bal $ (a) $ 235,720 Bal. Retained Earnings Beg bal $ 1,040 $ . $ $ 1,880 (1) $ 1,880 $ (1,040) Bal. Food Sales Revenue Beg bal Bal. $ 235,720 Catering Sales Revenue Beg bal $ - $ 6,400 Bal. Supplies expense $ . $ 11,270 $ $ 18,000 Beg bal Beg bal (f) Utilities expense $ . $ 640 $ 18,000 $ 6,400 Bal. $ 11,270 Bal. $ 640 Bal. Wages expense $ - $ 10,680 Bal. Fuel expense - 583 Beg bal Beg bal (i) $ $ (h) Bal. $ 10,680 Bal. $ 583

Calculation =102,000*2 Travelling Gourmet Inc. Journal entries Date Account (a) Cash Accounts Receivable Equipment Supplies Common Stock Additional Paid in Capital Debit $ 204,000 $ 4,200 $ 27,100 $ 2,300 =9,700+17,400 =940*1*2 $ 1,880 $ 235,720 (b) $ 580,000 Building Cash Mortgage Payable $ 116,000 $ 464,000 (c)' $ 72,000 Cash Notes Payable $ 72,000 (d) $ 14,600 Supplies Cash $ 14,600 (e)' Accounts Receivable Cash Catering Sales Revenue $ $ 2,040 4,360 $ 6,400 $ 18,000 $ 18,000 Cash Food Sales Revenue Supplies expense Supplies $ 11,270 $ 11,270 $ 640 Utilities expense Accounts Payable $ 640 (h) $ 583 Fuel expense Cash $ 583 (i) $ 10,680 Wages expense Cash $ 10,680 Retained Earnings $ 1,040 =520*2 Cash $ 1,040 Equipment Building Cash $ 72,000 $ 31,000 $ 103,000

Travelling Gourmet Inc. Account Names Cash Accounts Receivable Supplies Equipment Building Accounts Payable Notes Payable Mortgage Payable Common Stock Additional Paid in Capital Retained Earnings Food Sales Revenue Catering Sales Revenue Supplies expense Utilities expense Wages expense Fuel expense Totals ТВ Debit Credit 52,457 6,240 5,630 99,100 611,000 640 72,000 464,000 1,880 235,720 1,040 18,000 6,400 11,270 640 10,680 583 798,640 798,640