Questions 9-11 (of 23) E2-11 Recording Journal Entries and Preparing a Classifie

Question

Questions 9-11 (of 23) E2-11 Recording Journal Entries and Preparing a Classified Balance Sheet [LO 2-1, LO 2-3, LO 2-5 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 $36,000 cash from the investors who organized Down.com Corporation. b. Borrowed $15,000 cash and signed a note due in two years. c. Ordered equipment costing $18,000. d. Pur e. Recelved the equipment ordered in (d. paid for half of it, and put the rest on account. $6,000 in equipment, paying $2,000 in cash and signing a six-month note for the balance. References Section Break E2-11 ing Journal Entries and Preparing a Classified Balance Sheet [LO 2-1, LO 2-3, LO 2-5] value: 0.43 points E2-11 Part1

Explanation / Answer

Classified balance sheet :

ASSETS AMOUNT LIABILITIES AND STOCKHOLDER'S EQUITY AMOUNT CURRNT ASSETS CURRENT LIABILITES Cash 40000 Account payable 9000 Short term Notes payable 4000 NON CURRENT ASSETS LONG TERM LIABILITIES Equipment 24000 Long term notes payable 15000 STOCKHOLDER'S EQUITY Common stock 36000 TOTAL ASSETS 64000 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 64000

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