Assume Down.com was organized on May 1, to compete with Despair.com-a company th
ID: 2408133 • Letter: A
Question
Assume Down.com was organized on May 1, to compete with Despair.com-a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com's operations. Received $44,000 cash from the investors who organized Down.com Corporation. b. Borrowed $17,000 cash and signed a note due in two years. c. Ordered equipment costing $12,000. dPurchased $8,000 in equipment, paying $3,000 in cash and signing a six-month note for the balance Received the equipment ordered in (d), paid for half of it, and put the rest on account. 6.66 points Required 1. Summarize the financial effects of items (a)-(e) in a table (Enter any decreases to account balances with a minus sign.) Assets Accounts ST Notes LTNotes CashEquipment Beg 44,000 44,000 17,000 17 d. (3,000 (6,000 52,000 8,000 12,000 20,000 ,000 8,000 End. 17,000 60,000Explanation / Answer
Answers
ASSETS
=
LIABILITIES
+
STOCKHOLDER'S EQUITY
Cash
Equipment
=
Accounts Payable
ST Notes Payable
LT Notes Payable
+
Common Stock
Beg
=
+
a
$ 44,000.00
=
+
$ 44,000.00
b
$ 17,000.00
=
$ 17,000.00
+
c
=
+
d
$ (3,000.00)
$ 8,000.00
=
$ 5,000.00
+
e
$ (6,000.00)
$ 12,000.00
=
$ 6,000.00
+
End
$ 52,000.00
$ 20,000.00
=
$ 6,000.00
$ 5,000.00
$ 17,000.00
+
$ 44,000.00
Transaction
General Journal
Debit
Credit
a
Cash
$ 44,000.00
Common Stock
$ 44,000.00
b
Cash
$ 17,000.00
Notes payable Long Term
$ 17,000.00
c
No Entry
d
Equipment
$ 8,000.00
Cash
$ 3,000.00
Notes payable Short Term
$ 5,000.00
e
Equipment
$ 12,000.00
Cash
$ 6,000.00
Accounts Payable
$ 6,000.00
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash
$ 52,000.00
Accounts Payable
$ 6,000.00
Total Current Assets
$ 52,000.00
Notes payable Short Term
$ 5,000.00
Total Current Liabilities
$ 11,000.00
Property, Plant & Equipment:
Equipment
$ 20,000.00
Long Term Liabilities:
Notes payable Long Term
$ 17,000.00
Total Liabilities
$ 28,000.00
Stockholder's Equity
Common Stock
$ 44,000.00
Retained earnings
$ -
Total Stockholder's Equity
$ 44,000.00
Total Assets
$ 72,000.00
Total Liabilities & Stockholder's Equity
$ 72,000.00
ASSETS
=
LIABILITIES
+
STOCKHOLDER'S EQUITY
Cash
Equipment
=
Accounts Payable
ST Notes Payable
LT Notes Payable
+
Common Stock
Beg
=
+
a
$ 44,000.00
=
+
$ 44,000.00
b
$ 17,000.00
=
$ 17,000.00
+
c
=
+
d
$ (3,000.00)
$ 8,000.00
=
$ 5,000.00
+
e
$ (6,000.00)
$ 12,000.00
=
$ 6,000.00
+
End
$ 52,000.00
$ 20,000.00
=
$ 6,000.00
$ 5,000.00
$ 17,000.00
+
$ 44,000.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.