Determining Transactions from Changes in Financial Statements The Loc Tite Correctional Facility is a private enterprise prison that contracts services to a midwestern state. At October 1, the beginning of its fiscal year, the organization had the following balance sheet.
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Loc Tite Correctional Facility |
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Assets: |
Liabilities and Owners’ Equity: |
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Cash |
$43,725 |
Accounts payable |
$28,350 |
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Supplies |
65,700 |
Bonds payable |
450,000 |
|
Equipment |
350,000 |
Owners’ investment |
1,050,000 |
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Building |
1,400,000 |
Retained earnings |
883,575 |
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Accumulated |
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depreciation |
100,000 |
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Land |
652,500 |
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Total |
$2,411,925 |
Total |
$2,411,925 |
During the month of October, a number of economic events occurred and were entered into the accounting system. At the end of October, the company prepared the following financial statements.
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Loc Tite Correctional Facility |
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Balance Sheet (at Oct. 31) |
Income Statement (for Oct.) |
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Assets: |
Liabilities and Owners’ Equity: |
Revenues |
$810,000 |
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Cash |
$58,725 |
Accounts payable |
$28,350 |
Expenses: |
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|
Supplies |
28,200 |
Bonds payable |
0 |
Supplies |
37,500 |
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Equipment |
350,000 |
Owners’ Investment |
1,050,000 |
Depreciation |
8,625 |
|
Building |
1,400,000 |
Retained earnings |
1,302,450 |
Wages |
345,000 |
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Accumulated |
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depreciation |
108,625 |
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Land |
652,500 |
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Total |
$2,380,800 |
Total |
$2,380,800 |
Net income |
$418,875 |
Required
A. Identify the transactions that occurred during October.
B. Prepare a schedule that explains the changes in cash balance during October.