Reference no: EM132825645
Problem - 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 $80,100 cash when issuing 8,010 new shares.
b. Purchased some land by paying $2,100 cash and signing a note payable for $10,300 due in 2017.
c. Hired a new esthetician for a salary of $1,100 a month, starting next month.
d. Bought $1,150 in soaps and aromatherapy supplies for the spa on credit.
e. NGS purchased a company car for $17,900 cash (list price of $22,000) to assist in running errands for the business.
f. Nicole sold 100 of her own personal shares to Raea Gooding for $800.
g. Paid $480 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.