Question

2. Record the following transactions for another company: 12/1 Sell shares of common stock for $50,000 to obtain the funds to start the business. 12/1 Borrow $25,000 from the local bank and sign a note promissing to pay in four years. 7/4 Purchase equipment necessary for giving basketball training for $30,000. 12/1 Pay one year of rent in advance, $12,000 ($1,000 per month). 12/6 Purchase supplies on account, $1,300. 12/12 Provide basketball training to customers for cash, $5,500. 12/17 Provide basketball training to customers on account, $2,750. 12/23 Receive cash in advance for 12 training sessions to be given in the future, $1,200 12/28 Pay salaries to employees, $2,700. 12/30 Pay cash dividends of $500 to shareholders. ASSETS LIABILITIES Accounts receive. Cash Prepaid rent Supplies EQUITY Revenue Stock (expense) (dividend) Equip- ment Payables & Deferred notes revenue AWN 500 0 0 0 0 0 - 0 0 + ol Total assets: 0 Total liabilities & equity In balance

Answer 1

	ASSETS					=	Liabilities		+	Equity
#	Cash	Accounts Receivable	Supplies	Prepaid Rent	Equipment		Payables & Notes	Deferred Revenue		Stock	Revenue (Expense) (Dividend)
1	50,000									50,000
2	25,000						25,000
3	(30,000)				30,000
4	(12,000)			12,000
5			1,300				1,300
6	5,500										5,500
7		2,750									2,750
8	1,200							1,200
9	(2,700)										(2,700)
10	(500)										(500)
	36,500	2,750	1,300	12,000	30,000	=	26,300	1,200	+	50,000	5,050

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