M2-12 Reporting a Classified Balance Sheet LO 2-4] The following are the transac

Question

M2-12 Reporting a Classified Balance Sheet LO 2-4] The following are the transactions of Spotlighter, Inc., for the month of January: a. Borrowed $4,840 from a local bank on a note due in six months. b. Received $5,530 cash from investors and issued common stock to them. c. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year. d. Paid $750 cash for supplies. e. Bought and received $1,150 of supplies on account. Prepare a classified balance sheet for Spotlighter, Inc., as of January 31. SPOTLIGHTER INC. Balance Sheet At January 31

Explanation / Answer

SPOTLIGHTER INC. Balance Sheet At January 31 Current Assets: Current Liabilities: Cash $       8,970 Accounts Payable $          1,150 Supplies $       1,900 Notes Payable $          6,090 Total Current Assets $     10,870 Total Current Liabilities $          7,240 Long term Debt 0 Property, Plant and Equipment: Total Liabilities $          7,240 Equipment $       1,900 Total Fixed Assets $       1,900 Stockholder's Equity: Common Stock $          5,530 Total Assets $     12,770 Total Liabilities and Stockholder's Equity $       12,770 Working: a. Cash Beginning Balance 0 Add: Borrowed from bank 4840 Issued Common stock 5530 10370 Less: Purchased Equipment 650 Paid for supplies purchased 750 1400 Endin Balance 8970 b.Supplies Beginning Balance 0 Add: Supplies purchased for cash 750 supplies purchased on account 1150 1900 Less: Supplie used 0 0 Ending Balance 1900 C. Equipment Beginning Balance 0 Add: Equipment purchased 1900 1900 Less: Accumulated depreciation 0 0 Ending Balance 1900 D. Accounts Payable beginning Balance 0 Add: Purchased supplies on account 1150 1150 Less: Cash paid to creditors 0 0 Ending Balance 1150 E. Notes Payable Beginning Balance 0 Add: Borrowed from bank 4840 Purchased Equipment 1250 6090 Less: Cash paid for notes payable 0 0 Ending Balance 6090 F. Common Stock Beginning balance 0 Add: Issued Common Stock 5530 Less: Stock repurchased 0 0 Ending Balance 5530

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