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Relic Spotter Inc. Case: Transaction 1: (1) Sell Shares To Investors

(1) Relic Spotter Inc. sold shares to investors for $250,000 in cash. (2) The company used the cash to incorporate the business, buy land and a building, renovate the building, buy metal detectors and software, prepay for advertising, lend money, pay suppliers and dividends, receive prepaid rent and rental revenues. (3) The company then paid for inventory using cash.

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Yash Diwakar
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89 views

Relic Spotter Inc. Case: Transaction 1: (1) Sell Shares To Investors

(1) Relic Spotter Inc. sold shares to investors for $250,000 in cash. (2) The company used the cash to incorporate the business, buy land and a building, renovate the building, buy metal detectors and software, prepay for advertising, lend money, pay suppliers and dividends, receive prepaid rent and rental revenues. (3) The company then paid for inventory using cash.

Uploaded by

Yash Diwakar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Relic Spotter Inc.

Case: Transaction 1
• (1) Sell shares to investors No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000

Dr. Cash (+A) 250,000


Cr. Common Stock (+SE) 25,000
Cr. APIC (+SE) 225,000

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 3
• (3) Pay legal fees to No. Transaction Cash Operating Investing Financing
incorporate the business (1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)

Dr. Legal Fee Exp (+E, -SE) 3,900


Cr. Cash (-A) 3,900

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 4
• (4) Buy building and land No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Building (+A) 52,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Dr. Land (+A) 103,000
Cr. Mortgage Payable (+L) 124,000
Cr. Cash (-A) 31,000

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 5
• (5) Pay for renovation work to No. Transaction Cash Operating Investing Financing
building. (1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Dr. Building (+A) 33,000
(5)Bldg. Renovations (33,000) (33,000)
Cr. Cash (-A) 33,000

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 6
• (6) Buy Metal Detectors No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Metal Detectors (+A) 120,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 120,000 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 8
• (8) Pay for a software site No. Transaction Cash Operating Investing Financing
license (1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Dr. Software (+A) 2,100
(5)Bldg. Renovations (33,000) (33,000)
Cr. Cash (-A) 2,100 (6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 9
• (9) Prepay for advertising No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Prepaid Advertising (+A) 8,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 8,000 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 10
• (10) Lend money to Park No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Notes Receivable (+A) 5,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 5,000 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 13
• (13) Pay supplier No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Accounts Payable (-L) 2,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 2,000 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 14
• (14) Pay dividend No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Dividends Payable (-L) 2,500
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 2,500 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 15
• (15) Receive cash for future No. Transaction Cash Operating Investing Financing
unlimited rentals (1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Dr. Cash (+A) 1,200
(5)Bldg. Renovations (33,000) (33,000)
Cr. Unearned Rental Rev (+L) 1,200 (6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 16
• (16) Receive cash rental No. Transaction Cash Operating Investing Financing
revenue on the Metal (1)Sell shares 250,000 250,000
Detectors (3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
(5)Bldg. Renovations (33,000) (33,000)
Dr. Cash (+A) 120,100
(6)Buy Metal Det. (120,000) (120,000)
Dr. Accounts Receivable (+A) 4,200 (8)Buy Software (2,100) (2,100)
Cr. Rental Rev. (+R, +SE) 124,300 (9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200
(16)Met Det revenues 120,100 120,100

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 17
• (17) Pay for inventory No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Inventory (+A) 40,000 (4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 38,000 (5)Bldg. Renovations (33,000) (33,000)
Cr. Accounts Payable (+L) 2,000 (6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200
(16)Met Det revenues 120,100 120,100
(17)Buy Inventory (38,000) (38,000)

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 18
• (18) Receive cash from sales No. Transaction Cash Operating Investing Financing
of sundries (1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Dr. Cash (+A) 35,000 (5)Bldg. Renovations (33,000) (33,000)
Cr. Sales (+R, +SE) 35,000 (6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200
(16)Met Det revenues 120,100 120,100
(17)Buy Inventory (38,000) (38,000)
(18)Sundries sales 35,000 35,000

KNOWLEDGE FOR ACTION


Relic Spotter Inc. Case: Transaction 20
• (20) Pay employee wages No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
Dr. Sal & Wage Exp (+E, -SE) 82,000
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
Cr. Cash (-A) 82,000 (5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200
(16)Met Det revenues 120,100 120,100
(17)Buy Inventory (38,000) (38,000)
(18)Sundries sales 35,000 35,000
(20)Pay Salaries (82,000) (82,000)

KNOWLEDGE FOR ACTION


Final Totals
No. Transaction Cash Operating Investing Financing
(1)Sell shares 250,000 250,000
(3)Legal Fees (3,900) (3,900)
(4)Buy Bldg. & Land (31,000) (155,000) 124,000
(5)Bldg. Renovations (33,000) (33,000)
(6)Buy Metal Det. (120,000) (120,000)
(8)Buy Software (2,100) (2,100)
(9)Buy Advertising (8,000) (8,000)
(10)Loan to Park (5,000) (5,000)
(13)Pay Supplier (2,000) (2,000)
(14)Pay Dividends (2,500) (2,500)
(15)Rental prepayment 1,200 1,200
(16)Met Det revenues 120,100 120,100
(17)Buy Inventory (38,000) (38,000)
(18)Sundries sales 35,000 35,000
(20)Pay Salaries (82,000) (82,000)
78,800 17,400 (310,100) 371,500

KNOWLEDGE FOR ACTION

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