Question

Sparty Corporation has been operating for two years. The December 31, 2018 account balances are: Cash Accounts Receivable Inventory $250.000 65.000 29,000 20.000 180.000 210.000 Accounts Payable Salaries Payable Notes Payable - long term Contributed Capital Retained Earnings $190,000 45,000 175,000 220,000 124,000 Short-term Investments Equipment Land During the year 2019, the company had the below activities. Note that none of these activities should impact the income statement, only the balance sheet: we are assuming for simplicity that the company did not have any revenues or expenses during 2019. a. Collected $15,000 cash on open accounts receivable from customers. b. Bought additional inventory for $2.000 on account c. Received a $70,000 loan from the bank, payable in four years. d. Purchased additional short-term investments for $5,000 cash. e. Returned some defective inventory to a supplier for a full cash refund of $1,000. f. Ordered supplies worth $9.000 from Concord Supplies to be delivered next month. g. Paid off $25,000 of notes payable a year early. Ignore interest. h. Purchased additional equipment costing $40,000: paying $10,000 in cash and signing a promissory note to pay the balance in three years. i. Issued 20,000 shares of stock, receiving $100,000 in cash and land valued at $8,000 from investors. j. Paid off $30,000 of salaries owed from the prior year.
Sorry for the long problem, but I have done this problem twice and I get different totals for assets and liabilities...Thanks.

Answer 1

Journal Entries:

Event	Account title and explanation	Debit	Credit
a	Cash (A+)	$15,000
	Accounts receivable (A-)		$15,000
	[To record collections from customers]
b	Inventory (A+)	$2,000
	Accounts payable (L+)		$2,000
	[To record purchased inventory on account]
c	Cash (A+)	$70,000
	Notes payable (L+)		$70,000
	[To record loan from bank]
d	Short-term investments (A+)	$5,000
	Cash (A-)		$5,000
	[To record purchase of short-term investments]
e	Cash (A+)	$1,000
	Inventory (A-)		$1,000
	[To record purchase returns]
f	No Entry
g	Notes payable (L-)	$25,000
	Cash (A-)		$25,000
	[To record paid for notes payable]
h	Equipment (A+)	$40,000
	Cash (A-)		$10,000
	Notes payable (L+)		$30,000
	[To record purchase of equipment]
i	Cash (A+)	$100,000
	Land (A+)	$8,000
	Common stock (E+)		$108,000
	[To record issuance of common stock]
j	Salaries payable (L -)	$30,000
	Cash (A-)		$30,000
	[To record paid for salaries owed]
	SUM	$296,000	$296,000

T-Accounts:

Cash			Accounts receivable			Inventory
$ 250,000.00	$      5,000.00		$    65,000.00	$    15,000.00		$    29,000.00	$      1,000.00
$    15,000.00	$    25,000.00					$      2,000.00
$    70,000.00	$    10,000.00
$      1,000.00	$    30,000.00
$ 100,000.00
$ 366,000.00			$    50,000.00			$    30,000.00
Short-Term investment			Equipment			Land
$    20,000.00			$ 180,000.00			$ 210,000.00
$      5,000.00			$    40,000.00			$      8,000.00
$    25,000.00			$ 220,000.00			$ 218,000.00
Accounts payable			Salaries payable			Notes payable-Long term
	$ 190,000.00		$    30,000.00	$    45,000.00		$    25,000.00	$ 175,000.00
	$      2,000.00						$    70,000.00
							$    30,000.00
	$ 192,000.00			$    15,000.00			$ 250,000.00
Contributed Capital			Retained Earnings
	$ 220,000.00			$ 124,000.00
	$ 108,000.00
	$ 328,000.00			$ 124,000.00

Trial Balance:

Trial balance
Account title	Debit	Credit
Cash	$366,000
Accounts receivable	$50,000
Inventory	$30,000
Short-term investment	$25,000
Equipment	$220,000
Land	$218,000
Accounts payable		$192,000
Salaries payable		$15,000
Notes payable-long term		$250,000
Contributed capital		$328,000
Retained earnings		$124,000
Total	$909,000	$909,000

Balance Sheet:

Balance Sheet
Assets		Liabilities and Stockholders' equity
Current assets:		Current liabilities:
Cash	$366,000	Accounts payable	$192,000
Accounts receivable	$50,000	Salaries payable	$15,000
Inventory	$30,000	Total current liabilities	$207,000
Short-term investment	$25,000	Long-term liabilities:
Total current assets	$471,000	Notes payable	$250,000
Property,plant,and equipment:		Total liabilities	$457,000
Equipment	$220,000	Stockholders' equity:
Land	$218,000	Contributed capital	$328,000
Total property,plant and equipment	$438,000	Retained earnings	$124,000
		Total stockholders' equity	$452,000
Total Assets	$909,000	Total liabilities and stockholders' equity	$909,000