Enter each transaction into the accounting equation. Then, calculate the (1) amount of assets owned by Izzy’s Ice Cream Shop at the end of its first month of business and (2) the amount of net income for the month. All transactions took place during the first month; Izzy’s was open for 25 days.
1. Izzy started the business by contributing $5,500 in exchange for common stock, and the firm borrowed $3,500 from the bank.
2. Izzy’s Ice Cream Shop purchased an ice cream delivery truck for $4,500 cash.
3. The business purchased $1,200 worth of ice cream and other items (its inventory) for cash.
4. Izzy hired a delivery driver to work two days a week for a total of eight days the first month to help deliver ice cream for the new company. For this service, Izzy’s paid $25 each day worked.
5. The ice cream delivery service was popular and Izzy’s sold two-thirds of its inventory for total cash revenues of $3,600.
6. Izzy’s paid operating expenses of $215 the first month.
7. Izzy’s repaid $100 of the bank loan along with $5 of interest for the first month.