Question

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a. (Sample) Borrowed $5,540 from a local bank on a note due in six months. b. Received $6,230 cash from investors and issued common stock to them. C. Purchased $2,600 in equipment, paying $1,000 cash and promising the rest on a note due in one year. d. Paid $1,100 cash for supplies. e. Bought and received $1,500 of supplies on account. Assets Liabilities Stockholders' Equity a. Cash Notes Payable (short-term) 5,540 b. Cash Common Stock 6,320 5,540 6,230 2,600 (1,000) 1,100 (1,100) 1,500 Notes Payable (short-term) c. Equipment Cash d. Supplies Cash e. Supplies 1,600

Answer 1

Accounting equation

	Assets		=	Liabilities		+	Stockholder's equity
a	Cash	5540		Notes payable (short term)	5540
b	Cash	6230					Common Stock	6230
c	Equipment	2600
	Cash	-1000		Notes payable	1600
d	Supplies	1100
	Cash	-1100
e	Supplies	1500		Account payable	1500

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