Question

#3

The following are the transactions of Spotlighter, Inc., for the month of January.

1. Borrowed $4,740 from a local bank on a note due in six months.
2. Received $5,430 cash from investors and issued common stock to them.
3. Purchased $2,600 in equipment, paying $1,000 cash and promising the rest on a note due in one year.
4. Paid $1,100 cash for supplies.
5. Bought and received $1,500 of supplies on account.
   

Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginning balance of zero.

#4 Required:

The following information applies to the questions displayed below.]

Bearings & Brakes Corporation (B&B) was incorporated as a private company. The company’s accounts included the following at June 30:

Accounts Payable	$	91,000
Buildings		660,000
Cash		106,000
Common Stock		330,000
Equipment		180,000
Land		524,000
Notes Payable (long-term)		9,000
Retained Earnings		1,046,000
Supplies		6,000

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

1. Issued 4,500 shares of common stock for $450,000 cash.
2. Borrowed $140,000 cash from a local bank, payable in four years.
3. Bought a building for $198,000; paid $82,000 in cash and signed a three-year note for the balance.
4. Paid cash for equipment that cost $106,000.
5. Purchased supplies for $106,000 on the account.

Required:

1. Analyze transactions (a)–(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.

[The following information applies to the questions displayed below.]

Answer 1

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