Question

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a. (Sample) Borrowed $4,640 from a local bank on a note due in six months. b. Received $5,330 cash from investors and issued common stock to them. C. Purchased $1,700 in equipment, paying $550 cash and promising the rest on a note due in one year. d. Paid $650 cash for supplies. e. Bought and received $1,050 of supplies on account. Assets Liabilities Stockholders' Equity 4,640 Notes Payable (short-term) 4,640 a. Cash b. Cash

Answer 1

Shareholders' Equity Explanation Liabilities Notes Payable (short-term) 4640 + a b + Common stock Notes Payable (short-term) L 1150 + Assets Cash Cash Equipment Cash Supplies Cash Supplies 4640 5330 1700 -550 650 -650 1050 = = = = = = = + 5330 Cash is received thus debited. Since cash is paid for $550 thus cash will be credited. The remining 1700-550 = 1150 is the liability to be paid. Since cash is paid for $650 thus cash will be credited. Supplies will be debited. Both of these are current asset. It is a credit purchase thus liability will appear as acconts payable + + Accounts payable 1050| + Please give as many likes for the hard work.