Question

Fitness For All Ltd. is a new health club operating in a suburb of Winnipeg. The following transactions take place in September and
October 2017:
i. September 1: Fitness For All Ltd. is incorporated. The owner pays $125,000 for 5,000 shares of company stock.
ii. September 3: Fitness For All Ltd. signs a three-year lease for space for the club.
The owner pays $3,000 cash in rent for October and November.
iii. September 3–20: Renovations on the location are carried out at a cost of $20,000 cash. The expected useful life of the renovations is three years.
iv. September 21: Equipment worth $125,000 is purchased from a supplier. Fitness
For All Ltd. pays $75,000 in cash and promises to pay the remainder in six months. The estimated life of the equipment is five years.
v. September 25: Supplies are purchased on credit for $5,000.
vi. During September and October: Memberships to the club are sold to 300 people at $350 per person per year. Members pay 50 percent immediately and promise to pay the remainder in 30 days. Fitness for All Ltd. records revenue when a new member joins.
vii. During September and October: Employees are paid wages of $10,000. At the end of October, Fitness For All Ltd. owes employees $1,200.
viii. During September and October: Utilities costing $2,000 are paid.
ix. During September and October: Fitness For All Ltd. pays $2,700 toward the supplies purchased on credit on September 25.
x. During September and October: Fitness For All Ltd. collects $30,000 owed by members.
xi. During September and October: $3,900 of supplies is used.

Required:
a. Use an accounting equation spreadsheet to record the transactions that occurred during September and October.
b. Record all necessary adjusting entries (depreciation, rent, supplies, and wages).
c. Record the closing entry.
d. Prepare the balance sheet as of October 31, 2017 and an income statement and statement of retained earnings for the period ending October 31, 2017.



$1.99
Sales2
Views99
Comments0
  • CreatedFebruary 26, 2015
  • Files Included
Post your question
5000