Question

Model trains for sale to toy stores are produced by Whistle Stop Incorporated, a small manufacturing company. Whistle Stop also has a small service department that repairs customers' model trains for a fee. The company has been in business for five years. At the end of the most recent year, 2016, the accounting records reflected total assets of $510,000 and total abilities of $210,000. During the current year, 2017 the following summarized events occurred a. Issued additional shares for $105.000 cash b. Borrowed $122.000 cash from the bank and signed a ten-year note. c Built an addition on the factory for $202.000 and paid cash to the contractor d. Purchased equipment for the new addition for $33,000. paying $3.300 in cash and signing a note due in samonths for the balance e Returned a $3,300 piece of equipment, from (d), because it proved to be defective received a reduction of the note payable Purchased a delivery truck (equipment) for $10,500, paid $5,000 cash and signed a nine month note for the remainder 9. A shareholder sold $6,000 worth of his shares in Whistle Stop Incorporated to his neighbour Required: 1. Complete the spreadsheet given below, for increases and decreased in each account. The first transaction is used as an example. (Enter any decreases to account balances with a minus sign.) Transaction Assets Equipment Building Notes Payable Cash 105.000 105,000 b c d 1 105.000 105,000 2. Did you include event to in the spreadsheet? < Prev E e DELL

Answer 1

1.

	Assets	Liabilites	Shareholders Equity
Transactions	Cash	Equipments	Building	Note payable	Contributed Capital	Retained earnings
a	105,000				105,000
b	122,000			122,000
c	-202,000		202000
d	-3,000	33,000		30,000
e		-3,300		-3,300
f	-5,000	10,500		5,500
g
	17,000	40,200	202,000	154,200	105,000	0

2a. even (g) did not added in the spreadsheet, the transaction did not belong to company and its its shareholder transaction. hence need not added to company transaction

3. Opening BalanceTotal Assets = 510,000

Opening Balance Total Liabilites =2,10,000

hence Opening Shareholder's Equity = Total Assets - Total Liabilities

= 510,000-2,10,000

= 300,000

Total Assets at the year end	769,200
Total Liabilites at the year end	364,200
Total Shareholder's Equity at the year end	405,000

Total Assets at the year end = opening balance + additions

= 510,000+17,000+40,200+202,000

= 769,200

Total Liabilites at the year end = opening balance + additions

= 210,000+154,200

= 364,200

Total Shareholder's Equity at the year end = opening balance + additions

= 300,000 + 105,000

= 405,000

4. as on Deccember 31, 2007 the finance for investment in assets by both liabilites and shareholders equity.

the finance for investment in assets is from liabiltities more than the shareholders equity