Question

Using the accounting equation for transaction analysis, preparing financial statements, and calculating return on assets (ROA)Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the "Big Four" accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018.Requirements1. Analyze the effects of Canyon Canoe Company’s transactions on the accounting equation. Use the format of Exhibit 1-6, and include these headings: Cash; Accounts Receivable; Office Supplies; Canoes; Accounts Payable; Utilities Payable; Telephone Payable; Common Stock; Dividends; Canoe Rental Revenue; Rent Expense; Utilities Expense; Wages Expense; and Telephone Expense.2. Prepare the income statement of Canyon Canoe Company for the month ended November 30, 2018.3. Prepare the statement of retained earnings for the month ended November 30, 2018.4. Prepare the balance sheet as of November 30, 2018.5. Calculate the return on assets for Canyon Canoe Company for November 2018.

Answer 1

Canyon Canoe Company will need capital for funding its business activities.

Step-by-step explanation:

Canyon Canoe company will rent assets and use it on local lakes. The assets will not increase as they have not purchased the assets. The expense will increase by the rent amount. There will be service revenue which will be accounted in the Income statement and rent expense will be entered as cost of sales.