The following information applies to the questions displayed below.j Bearings &B

Question

The following information applies to the questions displayed below.j Bearings &Brakes; Corporation (B&B;) was incorporated as a private company. The company's accounts included the following at June 30 Accounts Payable Buildings Cash Common Stock Equipment Land Notes Payable (long-term) Retained Earnings Supplies $50,000 500,000 90,000 170,000 148,000 444,000 5,000 966,000 9,000 During the month of Jly, the company had the following activities a. Issued 6,000 shares of common stock for $600,000 cash b. Borrowed 560,000 cash from a local bank, payable in four years. c. Bought a building for $166,000; paid $66,000 in cash and signed a three-year note for the balance d. Paid cash for equipment that cost $90,000 e. Purchased supplies for $90,000 on account.

Explanation / Answer

Bearings & Brakes Corporation Balance Sheet Assets Liabilities & Shareholder's equity Current Asset Liabilities Cash 594000 Current Liabilities Supplies 99000 Accounts Payable 140000 Total current asset Total Current Liabilities Non-Current assets Non-current Liabilities Land 444000 Notes Payable(long term) 105000 Building 666000 Bank Loan(long term) 60000 Equipment 238000 Total Non current liabilities Total Non current assets Shareholder's equity Common stock 770000 Retained earnings 966000 Total Assets 2041000 Total Liabilities & Shareholder's equity 2041000 Working Notes Cash =90000+600000+60000-66000-90000 Supplies =9000+90000 Building =500000+166000 Equipment =148000+90000 Accounts Payable =50000+90000 Notes Payable(long term) =5000+100000 Bank Loan(long term) 60000 New item Common stock =170000+600000

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