A E C D E 3 4 Toys, Inc began operations on December 31, 2019 with the following transactions: 5 B 1. Purchased equipment for $15,000 F 2. Purchased inventory on accountfor 55,000 8 3. Issued common stock for $20,000 3 10 Toys, Inc's balance sheet including those transactions as of December 31, 2019, was as follows: 11 12 Toys, Inc. 13 Balance Sheet 14 Asot December 31. 1019 15 1B Assets: 1? Cash 5 5,000 18 Receivables - 13 Inventory 6,000 20 Land - 21 Property Plant and Equipment 15,000 22 23 Total Assets 5 16,000 24 25 Liabilities and Equity: 25 Accounts Payable 5 5,000 2? Note Payable - 28 Common Stock 20,000 23 Retained Earnings - 30 31 32 Total liabilities and stockholders' equity 5 26,000 33 H D L. U I: l' L7! H | U |\\ |_ IYI 35 During January 2020, the company had the following transactions: 38 3? Example: Made payments of 54,000 on outstanding accounts payable 38 1. Sold $2,000 of inyentoryto customers for $3,000 in cash. 38 2. Purchased $2,500 of new inyentoryfor cash 48 5. Sold $3,500 of inyentoryto customers on accountfor $5,500. 41 4. During the month, receiyed $3,500from customers as payments on their accounts 42 5. Borrowed $20,000 from the bank and issued stock for $5,000 to purchase land for 525,000 for 43 5. Paid employees $2,000for payroll 44 45 Required: 48 4? 1. Record the January 2020 transactions by adding and subtracting amounts in the rows ofthe 48 following table in a way that the row totals representthe end ofthe month balances in the 48 2. Explain the main characteristics of the balance sheet and the income statement and the 58 relationship between those two statements. 51 52 53 Balance Transaction Number I 54 at l2lf19 Example 1 2 S 4 5 5 Total 55 58 5? Cash 5 5,000 [4,000] 5 1,000 58 Receivables - - 58 Inventory 5,000 5,000 88 Land - - 81 Property Plant and Equipment 15,000 15,000 82 Total Assets 5 26,000 5 22.000 83 84 Accounts Payable 5 5,000 [4,000] 5 2,000 85 Note Payable - - 88 Common Stock 20,000 20,000 8? Retained Earnings - - 88 Total Liabilities and Equity 5 26,000 5 22,000 88 88 8? 88 88 F8 Ti ?2 F3 F4 ?5 F8 F? F8 F8 88 81 82 83 84 85 88 8? 88 88 88 81 82 83 84 85 88 8? 88 Common Stock 20000 Retained Earnings - Total Liabilities and Equity 5 26,000 Check [must equal zero] Income Statement Sales Cost of Goods Sold Payroll expenses Netlnoome Reouirem ent 1 Characteristics of a Balance Sheet Characteristics of an Income Statement Relationship between the Balance Sheet and the Income Statement