On March 1, S. Penman launched AniFoods Inc., an organic foods retailing company.... 1 answer below »

Analyzing Transactions Using the Financial Statement Effects Template

On March 1, S. Penman launched AniFoods Inc., an organic foods retailing company. Following are the transactions for its first month of business.

1. S. Penman contributed $100,000 cash to the company in return for common stock. Penman also lent the company $55,000. This $55,000 note is due one year hence.

2. The company purchased equipment in the amount of $50,000, paying $10,000 cash and signing a note payable to the equipment manufacturer for the remaining balance.

3. The company purchased inventory for $80,000 cash in March.

4. The company had March sales of $100,000, of which $60,000was for cash and $40,000 on credit. Total cost of goods sold for its March sales was $70,000.

5. The company purchased advertising time from a local radio station for $10,000 cash.

6. During March, $7,500 worth of radio spots purchased in transaction 5 are aired. The remaining spots will be aired in April.

7. Employee wages earned and paid during March total $17,000 cash.

8. Prior to disclosing the financial statements, the company recognized that employees had earned an additional $1,000 in wages that will be paid in the next period.

9. The company recorded $2,000 of depreciation for March relating to its equipment.

Required

a. Record the effect of each transaction using the financial statement effects template.

b. Prepare a March income statement and a balance sheet as of the end of March for AniFoods Inc.