Cats and Dogs Company: Cash Transactions Scenario
The following cash transactions took place during March, the first month of business for Cats and Dogs Company.
D.C. Dawg started a business, Cats and Dogs Company, by contributing $6,000. 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. The company earned $900 in revenue. Expenses amounted to $650. Distributions to owners amounted to $25.
You are to complete the following tasks:
1. Show how each 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.