Question: The transactions and adjustments related to the first month of

The transactions and adjustments related to the first month of operations of Zoe Amelia Corp. were as follows:
a. Issued common stock to the initial stockholders in exchange for their cash investment.
b. Signed a lease for office space and paid the first three months of rent in advance.
c. Purchased office equipment and shelving for cash.
d. Purchased merchandise inventory; made a partial payment in cash, and agreed to pay the balance within 30 days.
e. Sold merchandise inventory on account for an amount greater than the cost of the inventory sold.
f. Paid employees for the first two weeks of the month.
g. At the end of the month, accrued wages owed to employees for the second two weeks of the month.
h. Recognized rent expense for one month of the payment of rent in advance in transaction b (as a reclassification adjusting entry).

Enter the following column headings across the top of a sheet of paper:
Enter the transaction/adjustment in the first column, and show the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on net income by indicating the account name(s) affected and whether each is an addition (1) or subtraction (2). Items that affect net income should not be shown as affecting stockholders'equity.
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  • CreatedOctober 05, 2013
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