The following are the transactions relating to the formation of Cardinal Mowing Services, Inc., and its...

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Accounting

The following are the transactions relating to the formationof Cardinal Mowing Services, Inc., and its first month ofoperations.
The firm was organized and the initial stockholders investedcash of $420.
The company borrowed $630 from a relative of one of theinitial stockholders; a short-term note was signed.
Two zero-turn lawn mowers costing $336 each and a professionaltrimmer costing $91 were purchased for cash. The original listprice of each mower was $427, but a discount was received becausethe seller was having a sale.
Gasoline, oil, and several packages of trash bags werepurchased for cash of $63.
Advertising flyers announcing the formation of the businessand a newspaper ad were purchased. The cost of these items, $119,will be paid in 30 days.
During the first two weeks of operations, 47 lawns were mowed.The total revenue for this work was $493; $326 was collected incash, and the balance will be received within 30 days.
Employees were paid $294 for their work during the first twoweeks.
Additional gasoline, oil, and trash bags costing $77 werepurchased for cash.
In the last two weeks of the first month, revenues totaled$644, of which $263 was collected.
Employee wages for the last two weeks totaled $357; these willbe paid during the first week of the next month.
It was determined that at the end of the month the cost of thegasoline, oil, and trash bags still on hand was $21.
Customers paid a total of $105 due from mowing servicesprovided during the first two weeks. The revenue for these serviceswas recognized in transaction f.
Required:
a. Record each transaction in the appropriate columns. (If antransaction/Adjustment are not affecting the balance sheet categoryor income statement, leave the cells blank. Enter decreases toaccount balances as a negative.)

b. Calculate the total assets, liabilities, and stockholders’equity at the end of the month and calculate the amount of netincome for the month.

c. After completing parts a through l, prepare an incomestatement for Cardinal Mowing Services, Inc., for the monthpresented and a balance sheet at the end of the month. (Enterdecreases to account balances as a negative.)

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Transcribed Image Text

The following are the transactions relating to the formationof Cardinal Mowing Services, Inc., and its first month ofoperations.The firm was organized and the initial stockholders investedcash of $420.The company borrowed $630 from a relative of one of theinitial stockholders; a short-term note was signed.Two zero-turn lawn mowers costing $336 each and a professionaltrimmer costing $91 were purchased for cash. The original listprice of each mower was $427, but a discount was received becausethe seller was having a sale.Gasoline, oil, and several packages of trash bags werepurchased for cash of $63.Advertising flyers announcing the formation of the businessand a newspaper ad were purchased. The cost of these items, $119,will be paid in 30 days.During the first two weeks of operations, 47 lawns were mowed.The total revenue for this work was $493; $326 was collected incash, and the balance will be received within 30 days.Employees were paid $294 for their work during the first twoweeks.Additional gasoline, oil, and trash bags costing $77 werepurchased for cash.In the last two weeks of the first month, revenues totaled$644, of which $263 was collected.Employee wages for the last two weeks totaled $357; these willbe paid during the first week of the next month.It was determined that at the end of the month the cost of thegasoline, oil, and trash bags still on hand was $21.Customers paid a total of $105 due from mowing servicesprovided during the first two weeks. The revenue for these serviceswas recognized in transaction f.Required:a. Record each transaction in the appropriate columns. (If antransaction/Adjustment are not affecting the balance sheet categoryor income statement, leave the cells blank. Enter decreases toaccount balances as a negative.)b. Calculate the total assets, liabilities, and stockholders’equity at the end of the month and calculate the amount of netincome for the month.c. After completing parts a through l, prepare an incomestatement for Cardinal Mowing Services, Inc., for the monthpresented and a balance sheet at the end of the month. (Enterdecreases to account balances as a negative.)