How each transaction affects the accounting equation

Assignment Help Accounting Basics

Reference no: EM13130835

1. Rick Jones opened Bass Lake Eatery by contributing $25,000 on April 1, 2010, in exchange for common stock.
2. Bass Lake Eatery borrowed $10,000 from the bank on April 1. The note is a 1-year, 12% note, with both principal and interest to be repaid on March 31, 2011.
3. Rick Jones paid $1,100 cash to rent equipment for the shop for the first of the month.
4. Rick Jones paid $485 cash for the utility bill for the first of the month.
5. Bass Lake Eatery earned $6,800 in revenue the first month, all cash.
6. Rick Jones hired a cashier and paid $577 cash in salary expense for the first month.
7. Bass Lake Eatery paid distributions to Rick Jones in the amount of $1,000 for the first month.
8. At the end of the month, $100 of interest payable is due on the note from #2.
Required:
A. Show how each transaction affects the accounting equation.
B. Prepare the four basis financial statements for the month of April at the end of the month.
C. Give one additional piece of information related to the transactions that could be recorded in an information system for a purpose other than the financial statements.

Reference no: EM13130835

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