Reference no: EM132580480

Transactions for Accounting Cycle Quiz

Snow, Sun and Fun Inc. is a business operating in Canada and several northern areas of the US. During the winter they sell snow removal equipment - shovels, ice melt etc. In the summer they sell pool maintenance equipment as well as gear for kayaks and canoes. They began their operations on January 1st, 2017. Please prepare set of financial statements for the first month of operations. You will use the quiz on the Coursera site to answer several questions about key accounts.

1) Shareholders contributed $125,000 in exchange for their common stock.

2) SSF signed a lease for its warehouse and offices, paying $18,000 in advance for occupancy of six months.

3) SSF acquired a forklift and storage fixtures. They paid $20,000 in cash and agreed to pay another $28,000 in three years (ignore interest). The equipment is expected to last 4 years (48 months).

4) SSF paid $210,000 to purchase shovels and snow removal items for resale. All items were purchased on account with payment due in three months or less.

5) Sales of $260,000 were made on account. The merchandise had originally cost $180,000.

6) Collections of $150,000 were made from customers. Payments of $140,000 were made to suppliers.

7) Employees earned $5,000 in wages for the month of January. The company uses electronic deposits, so amounts for paychecks are transferred into the employee's accounts on the last day of the month when wages were earned.

8) Paid a dividend of $15,000 to the shareholders

Problem 1: Your responses to all questions on this quiz should be based on the financial statements you have created for Snow, Sun and Fun Inc. The instructions and the transactions are included in the readings that proceeded this quiz. All numeric answers should be provided in thousands. That is, $10,000 would be written as 10 or $260,000 would be written as 260.

First question, what is the cash balance as of the end of the month?

(Note - for all questions asking for numerical answers, write the number only, no dollar sign ($))

Problem 2: What is total current assets?

Problem 3: What is total assets?

Problem 4: What is total liabilities?

Problem 5: What is total stockholders equity?

Problem 6: What is retained earnings?

Problem 7: What is net income?

Problem 8: Which item would be presented first on the asset portion of the balance sheet?

• Accounts Receivable
• Inventory
• Cash
• Property, Plan and Equipment

Problem 9: What is the difference between the balance sheet and the income statement?

Problem 10: What do we call the process of reconciling the balance sheet and the income statement?