Alphadale Community Bank, Inc

3 Pages Posted: 21 Oct 2008

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Abstract

Alphadale Community Bank, Inc., began operating as a one-branch bank on January 1, 2006. It was dedicated to serving those in the small community of Alphadale who just wanted basic banking services without all the bells and whistles in a place where they felt comfortable and at home every time they walked through the door. The transactions that took place during its first year of operation are listed, and students are asked to record all transactions related to the first year of operations, prepare a December 31, 2006 balance sheet, and prepare an income statement for the year ended. The worksheet to record these transactions is provided.

Excerpt

UVA-C-2275

ALPHADALE COMMUNITY BANK, INC.

Alphadale Community Bank, Inc., began operating as a one-branch bank on January 1, 2006. It was dedicated to serving those in the small community of Alphadale who just wanted basic banking services without all the bells and whistles in a place where they felt comfortable and at home every time they walked through the door. The following transactions occurred during its first year of operation.

1. On January 1, 10 investors contributed a total of $ 7,000,000 in cash to the bank in exchange for common stock.

2. On January 1, the bank took out a long-term loan of $ 3,000,000 to provide part of the cash it needed to get bank operations up and running.

3. In January, the bank purchased $ 20,000 in supplies from Office Experts, Inc., that would be needed in the day-to-day operations of the bank. Office Experts, Inc., allowed the bank to make this purchase on account rather than pay cash immediately.

. . .

Keywords: financial operations, income statement, balance sheet

Suggested Citation

Lynch, Luann J., Alphadale Community Bank, Inc. Darden Case No. UVA-C-2275, Available at SSRN: https://ssrn.com/abstract=1277009

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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