The Following Events Are for Holiday Travel Services for the Year

question 46

Essay

The following events are for Holiday Travel Services for the year 2016,the first year of operations.Assume that all transactions involve the receipt or payment of cash.
1)The business acquired $50,000 from stock issued to owners.
2)Creditors loaned the company $27,500.
3)The company provided services to its customers and received $75,400.
4)The company paid expenses amounting to $63,250.
5)The company purchased land for $25,000.
6)The company paid a dividend of $5,500 to its owners.
Required:
a)Show the effects of the above transactions on the accounting equation (use appropriate element and account headings).For those events that affect retained earnings,indicate in a separate column the appropriate temporary account.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.
b)Prepare an income statement and balance sheet for the year 2016.Precede the amount with a minus sign if the transaction reduces that section of the income statement.

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