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Chapter 1: 55CP_4 (page 52)

Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the 鈥淏ig Four鈥� accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Nov. 1 Received \(16,000 cash to begin the company and issued common stock to Amber and Zack. 2 Signed a lease for a building and paid \)1,200 for the first month鈥檚 rent. 3 Purchased canoes for \(4,800 on account. 4 Purchased office supplies on account, \)750. 7 Earned \(1,400 cash for rental of canoes. 13 Paid \)1,500 cash for wages. 15 Paid \(50 dividends to stockholders. 16 Received a bill for \)150 for utilities. (Use separate payable account.) 20 Received a bill for \(175 for cell phone expenses. (Use separate payable account.) 22 Rented canoes to Early Start Daycare on account, \)3,000. 26 Paid \(1,000 on account related to the November 3, 2018, purchase. 28 Received \)750 from Early Start Daycare for canoe rental on November 22, 2018. 30 Paid $100 dividends to stockholders. Requirements 4. Prepare the balance sheet as of November 30, 2018.

Short Answer

Expert verified

In the balance sheet, total assets equals $22,100, total liabilities equals $4,875, and total stockholders鈥� equity equals $17,225.

Step by step solution

01

Explanation on Balance Sheet

Balance sheet indicates the balances of assets, liabilities, and owners鈥� equity of a company for a particular accounting period.

02

Details of balance sheet

The balance sheet is shown as follows:

Canyon Canoe Company

Balance Sheet

November 30, 2018

Assets

Liabilities

Cash

$14,300

Accounts Payable

$4,550

Accounts Receivable

2,250

Utilities Payable

150

Office Supplies

750

Telephone Payable

175

Canoes

4,800

Total Liabilities

$4,875

Stockholders鈥� Equity

Common Stock

16,000

Retained Earnings

1,225

Total Stockholders鈥� Equity

17,225

Total Assets

$22,100

Total Liabilities and Stockholders鈥� Equity

$22,100

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