Question

Dennen Inc. for the month of January, borrowed $30,000 from a local bank, lent 10,000 to affiliate due in 1 year, sold to an investor 100 additional share with a .10 per share and a market price of $5 per share and received cash, purchased $15,000 on equipment paying $5,000 cash and signing a note for the rest due in 1 year, and declared and paid $2,000 in dividends to stockholders. Enter in a T-Account and determine the ending account balance.

Cash

Beg. Balance   

End. Balance

Equipment

Beg. Bal    

End Bal

Common Stock

Beg Bal

End Bal

Retained Earning

Beg. Bal

End. Bal

Notes Receivable

Beg. Bal

End. Bal.

Additional Paid in capital

Beg. Bal

End Bal

Answer 1

Important Note: Since the Beginning Balances of the above accounts are not provided, it is assumed that there are no Beginning Balances for these accounts. Therefore, the beginning balances will be zero for each account.

Cash
Beginning Balance	0
(a)	30,000
(c)	500
		10,000	(b)
		5,000	(d)
		2,000	(e)
Ending Balance	13,500

                               

Equipment
Beginning Balance	0
(d)	15,000
Ending Balance	15,000

Common Stock
Beginning Balance		0
		10	(c)
Ending Balance		10

Retained Earnings
Beginning Balance		0
(e)	2,000
Ending Balance	2,000

Notes Receivable
Beginning Balance	0
(b)	10,000
Ending Balance	10,000

Additional Paid-in Capital
Beginning Balance		0
		490	(c)
Ending Balance		490

Notes to Accounts:

Refer to the transactions to understand the above T-Accounts.

Transaction	General Journal	Debit	Credit
a.	Cash	$         30,000
	Notes Payable		$         30,000
	(Borrowed cash from Local Bank)
b.	Notes Receivable	$         10,000
	Cash		$         10,000
	(Notes Receivable due in a year for cash lent to affiliate)
c.	Cash ($5 x 100 shares)	$              500
	Common Stock ($0.10 x 100 shares)		$                10
	Additional Paid-in Capital ($4.90 x 100 shares)		$              490
d.	Equipment	$         15,000
	Cash		$          5,000
	Notes Payable		$         10,000
	(Purchased Equipment for cash and note due in one year)
e.	Retained Earnings	$           2,000
	Cash		$          2,000
	(Paid Dividends to Stockholders)