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ACCT 2121 Spring 2012 Chapter 2 Post Lecture

Deliberate Speed Corporation (DSC) was incorporated as a private company on June 1, 2010. The company's accounts included the following at June 30, 2010:

 

   Accounts Payable                                         $10,000   

  Factory Building                                             100,000   

  Cash                                                                   26,000   

  Contributed Capital                                      180,000   

  Equipment                                                       118,000   

  Land                                                                   200,000   

  Notes Payable                                                2,000   

  Retained Earnings                                         259,000   

  Supplies                                                            7,000   

 

During the month of July, the company had the following activities:

a.            Issued 4,000 shares of stock for $400,000 cash.

b.            Borrowed $90,000 cash from a local bank, payable June 30, 2012.

c.             Bought a factory building for $182,000; paid $82,000 in cash and signed a three-year note for the balance.

d.            Paid cash for equipment that cost $200,000.

e.            Purchased supplies for $30,000 on account.

Required:

1              Analyze transactions (a)–(e) to determine their effects (+ for increase and – for decrease) on the accounting equation.

2              Record the transaction effects determined in part (a) using a journal entry format.

3              Summarize the journal entry effects from part (b) using T-accounts

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