Assume Down.com was organized on May 1, to compete with Despair.com-a company th

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 a. Received $39,000 cash from the investors who organized Down.com Corporation. b. Borrowed $18,000 cash and signed a note due in two years. c. Ordered equipment costing $21,000. d. Purchased $9,000 in equipment, paying $3,000 in cash and signing a six-month note for the balance. e. Received the equipment ordered in (. paid for half of it, and put the rest on account 10.00 points Required: 1. Summarize the financial effects of items (aj-(e) in a table. (Enter any decreases to account balances with a minus sign.) Liabilities Accounts ST Notes LT Notes Payable Equity Commorn Stock Cash Equipment Payable Payable 39,000 18,000 39,000 18,000 (3,000 (10,500 43,500 9,000 21,000 30,000 6,000 10,500 10,500 End 6,000 18,000 39,000

Explanation / Answer

Except some very minor corrections ( as below) , all are correct

Question 1 Errors rectified Down.com No. Transaction General Journal Debit Credit 1.. a. Cash 39000 Common Stock 39000 2.. b. Cash 18000 LT Notes Payable 18000 Ques. 2 Deliberate Speed Corporation Cash account Beg.bal. 42750 a. 430000 b. 143000 c. 102500 d. 227000 End. Bal. 286250

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