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    Financial Statements for a Cats and Dogs Company

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    The following cash transactions took place during March, the first month of business for Cats and Dogs Company: You may refer to Units 1 & 2 and the multimedia presentation and activity for this course for assistance.

    1. D.C. Dawg started a business, Cats and Dogs Company, by contributing $6,000.
    2. The Cats and Dogs Company borrowed $2,000 from the bank on March 1. The note is a 1-year, 12% note, with both principal and interest to be repaid on February 28 of next year.
    3. The company earned $900 in revenue.
    4. Expenses amounted to $650.
    5. Distributions to owners amounted to $25.

    You are to complete the following tasks:
    1. Show how each cash transaction affects the accounting equation.
    2. Give one additional piece of information related to the transaction that could be recorded in an information system for a purpose other than the financial statements.
    3. Prepare the four basic financial statements for the month of March.

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    Solution Summary

    The expert examines financial statements for a cats and dog company. The month of March is examined.