Answer:
BALANCE SHEETS 31 Jan
Cash $8,070
Supplies $1,000
TOTAL CURRENT ASSETS $9,070
Property and Equipment $1,000
TOTAL NONCURRENT ASSETS 1,000
TOTAL ASSETS $10,070
Notes Payable $4,740
Accounts Payable $0,700
TOTAL CURRENT LIABILITIES $5,440
TOTAL NONCURRENT LIABILITIES $0,000
TOTAL LIABILITIES $5,440
Common Stock $4,630
TOTAL EQUITY $4,630
TOTAL EQUITY & LIABILITIES $10,070
Explanation:
a. Borrowed $3,940 from a local bank on a note due in six months
Debit $3,940 Cash
Credit $3,940 Notes Payable
b. Received $4,630 cash from investors and issued common stock to them
Debit $4,630 Cash
Credit $4,630 Common Stock
c. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year.
Debit $1,000 Equipment
Credit $0,200 Cash
Credit $0,800 Note Payable
d. Paid $300 cash for supplies
Debit $0,300 Supplies
Credit $0,300 Cash
e. Bought and received $700 of supplies on account
Debit $0,700 Supplies
Credit $0,700 Accounts Payable
Cash 8,070
Supplies 1,000
Current Assets 9,070
Equipment 1,000
Non-current Assets 1,000
Total Assets 10,070
Account Payable 1,500
Note Payable 3,940
Total Liabilities 5,440
Common Stock 4,630
Total Equity 4,630
Total Liaiblities + Owner's Equity 10,070
Auxiliar T-account
Cash
Debit Credit
3,940
4,630 200
300
8,070
Supplies
Debit Credit
300
700
1,000
Account Payable
Debit Credit
800
700
1,500
