Purchase Solution

Effect on accounting equation of transactions

Not what you're looking for?

Ask Custom Question

Can you help me with accounting spreadsheet with the following problem? I think I am trying to make to much into the financial information and continue to miss steps on the accounting spreadsheet and responses.

Overview
Company organized 1/1/205 by 4 people. Each person invested $10,000 in the company and issued 8,000 shares of stock as the only stockholders. During the 1st 6 months the company had the following events:

*collected total of $40,000 from the organizers and in turn issued the shares of stock.

*purchased a building for $65,000, equipment for $16,000 and 3 acres of land for $12,000; paid $13,000 in cash & signed a note for the balance, to be paid in 15 yrs.

*One stockholder reported to the company that 500 of his stock had been sold & transferred to another stockholder for $5,000 cash

*Purchased supplies for $500 cash

*Sold one acre of land for $4000 cash to another company

*Lent one of the shareholders $5,00 for moving cost, recieved signed 6 month note from the shareholder

Questions:

1 - Was company organized as partnership or corp?

2 - Can you assist with showing how the above items go on a accounting spreadsheet with

Assets (Notes= Cash / Supplies / Receivable / Land / Bldg / Equipment) =

Liabilities (Notes Payable) +

Stockholders Equity (contributed capital & retained earnings)

3 - when completing the spreadsheet do you include the transaction from the selling of 500 shares for $5,000 cash in the spreadsheet?

4- based on the spreadsheet, can you help me understand the following amounts? Total assets at the end of the month, total liabilities at the end of month, total stockholders equity at the end of month, cash balance at end of month, total current assets at end of month

5 - At the end of Jan 31, 2005 did most of the company financing for investments in assets primarily come from liabilities or stockholders equity?

Purchase this Solution

Solution Summary

The solution explains the effect on assets, liabilities and equity of various transactions.

Solution Preview

1 - Was company organized as partnership or corp?

The company is organized as a corp since only corporations issue shares of stock.

2 - Can you assist with showing how the above items go on a accounting spreadsheet with

Assets (Notes= Cash / Supplies / Receivable / Land / Bldg / Equipment) =

Liabilities (Notes Payable) +

Stockholders Equity (contributed capital & retained earnings)

Please see the attached file

3 - when completing the ...

Purchase this Solution


Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Operations Management

This quiz tests a student's knowledge about Operations Management

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.