Question

Required information (The following information applies to the questions displayed below.) 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 $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable $5,300 in equipment, a van (equipment) appraised at a fair value of $13,000, and $1,200 in supplies. Gave the two owners each 500 shares of common stock with a par value of $1 per share. b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10 year mortgage note from a local bank for the rest. c. Borrowed $50,000 from the local bank on a 10 percent, one-year note. d. Purchased food and paper Supplies costing 10,200 in March: paid cash. e. Catered four parties in March for $4,200: $1,600 was billed and the rest was received in cash. f. Sold food at the retail store for $16,900 cash: the food and paper supplies used cost $10,830. (Hint: Record two the revenue effect separate from the expense effect:) g. Received a $420 telephone bill for March to be paid in April. h. Paid $363 in gas for the van in March Paid $6,280 in wages to employees who worked in March j. Paid a $300 dividend from the corporation to each owner. k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash. Required: 1. Prepare an unadjusted classified income statement in good form for the north of March

1. prepare an unadjusted classified income statement in good form for the month of March

Answer 1

1)

LISA FREES AND AMELIA ELLINGER
Unadjusted Classified Income Statement
For the Month of March
Service Revenue	$4,200
Sales Revenue	$16,900
Total Revenues	$21,100
Less: Expenses:
Food and Paper Supplies Expenses for services	($10,200)
Food and Paper Supplies Expenses for sales	($10,830)
Telephone Expenses	($420)
Gas Expenses	($363)
Wages Expenses	($6,280)
Interest Expense ($50,000*10/100*1/12 months)	($417)
Net Income (Loss)	($7,410)
Note: Dividends do not show in Income Statement.