Question

You own a small bakery. Given the following transactions, complete the T-Accounts, including titles and closing balances. • Take out a loan for $1.000 from the bank. • Purchase $300 in flour using cash. • Purchase $250 in equipment on credit from The Bread Warehouse • Sell $100 in flour to Joe's Bakery for Cash • Your friend gives you $2,500 cash for ownership of your company • You raise $500 in cash by offering a bond liability Complete your Balance Sheet. Cirele the mathematical functions that completes the accounting equati Assets: + / - / - Liabilities: +/-/= Owners Equity:

left column is debits / right side on t charts is credits

right side of t chart is credit left side is debit

Answer 1

T-Accounts:

Cash			Notes payable			Bonds payable
$1,000	$300			$1,000			$500
$100
$2,500
$500
Bal. $3,800				Bal. $1,000			Bal. $500
Inventory			Accounts payable
$300	$100			$250
Bal.$200				Bal. $250
Equipment			Owner's Capital
$250				$2,500
Bal. $250				Bal. $2,500

Balance sheet equation:

Assets: 4,250 = Liabilities: 1,750 + Owner's equity: $2,500

Explanations:

Cash	$3,800
Inventory	$200
Equipment	$250
Total Assets	$4,250
Notes payable	$1,000
Accounts payable	$250
Bonds payable	$500
Total liabilities	$1,750
Owner's equity:
Owner's capital	$2,500