Complete T-accounts to summarize the transactions

Reference no: EM132818535

Problem - Accounting for the Establishment of a Business

Nicole has decided that she is going to start her business. Nicole's Getaway Spa (NGS). A lot has to be done when starting a new business. Here are some transactions that have occurred prior to April 30, 2017.

a. Received $78,600 cash when issuing 7,860 new shares.

b. Purchased some land by paying $1,800 cash and signing a note payable for $8,800 due in 2017.

c. Hired a new esthetician for a salary of $350 a month, starting next month.

d. Bought $1,000 in soaps and aromatherapy supplies for the spa on credit.

e. NGS purchased a company car for $17,850 cash (list price of $27,000) to assist in running errands for the business.

f. Nicole sold 100 of her own personal shares to Raea Gooding for $900.

g. Paid $290 of the amount owed in d.

Required -

1. Prepare journal entries for each transaction.

2. Assuming that the beginning balances in each of the accounts are zero, complete T-accounts to summarize the transactions a-g.

3. Prepare a classified balance sheet at April 30, 2017, using the information given in the transactions.

4. Calculate the current ratio at April 30, 2017.

Reference no: EM132818535

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