Question

E2-9 (Algo) Analyzing the Effects of Transactions in T-Accounts LO2-4
Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors. The following activities occurred during the year:

1. Received $89,000 cash from the six investors; each investor was issued 10,300 shares of common stock with a par value of $0.10 per share.
2. Purchased equipment for use in the business at a cost of $37,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
3. Signed an agreement with a cleaning service to pay $310 per week for cleaning the corporate offices next year.
4. Received an additional contribution from investors who provided $4,900 in cash and land valued at $34,000 in exchange for 2,900 shares of stock in the company.
5. Lent $4,400 to one of the investors, who signed a note due in six months.
6. Bennett Griffin borrowed $8,900 for personal use from a local bank, signing a one-year note.

E2-9 Part 2

2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:

Assets_______ = Liabilities ________ + Stockholders' Equity___________

Answer 1

2

Assets 155650 = Liabilities 27750 + Stockholders' Equity 127900

Workings:
	Assets	Liabilities	Stockholders' Equity
a	89000		89000
b	27750	27750
c	0	0	0
d	38900		38900
e	0	0	0
f	0	0	0
Balances	155650	27750	127900