Anya’s Bookstore Part A – Year 1 of Operations
On 1st January 2015, Anya decided to set up a company, which would own and operate an antiquarian bookshop in Houston. She estimated that to put the business on a sound financial footing, she actually needed $40,000. Following are the details of transactions that took place in 2015:
1. January 1st : Anya contributed $10,000 and her friend (who is a 50% shareholder along with Anya) contributed $10,000
2. January 1st : Borrowed $20,000 from bank @ 15% per annum for 4 years. Interest will be paid at the end of the year. Assume loan will be paid on January 1, 2019.
3. February 5th : Rented a shop. Rental expenses of $3,000 would be paid in cash on December 31st.
4. February 11th: Purchased books on credit for $10,000
5. March 7th : Sold books originally costing $5,000 for $10,000 cash
6. June 12th : Purchased books costing $30,000 on credit
7. June 29th : Sold books originally costing $20,000 for $35,000 cash
8. October 9th : Paid $25,000 to trade creditors
9. December 31st : Paid salary to bookshop manager of $10,000
10. December 31st : Paid electricity bill of $2,000
11. December 31st : Paid interest on bank loan
Record these transactions in the Year 1 worksheet provided. Prepare the income statement and balance sheet.