Question

[The following information applies to the questions displayed below.) Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors. The following activities occurred during the year: a. Received $88,000 cash from the six investors; each investor was issued 10,200 shares of common stock with a par value of $0.20 per share. b. Purchased equipment for use in the business at a cost of $36,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). c. Signed an agreement with a cleaning service to pay $300 per week for cleaning the corporate offices next year. d. Received an additional contribution from investors who provided $4,800 in cash and land valued at $33,000 in exchange for 2,800 shares of stock in the company e. Lent $4,300 to one of the investors, who signed a note due in six months. f. Bennett Griffin borrowed $8,800 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

Preparation of Accounting Equation and T Accounts Cash Beg. Bal. Beg. Bal. Common Stock 88000 Common Stock 4800 9000 Equipment End. Bal. 83800 End. Bal. Notes Receivables 0 4300 Investor 4300 Land Equipment 0 9000 27000 36000 Beg. Bal. Common Stock Beg. Bal. Cash Notes Payable End. Bal. 33000 End. Bal. 33000 Beg. Bal. Notes Payable 0 27000 Equipment Beg. Bal. Common stock 0 12240 Cash 560 Cash and land 12800 End. Bal. 27000 End. Bal. Beg. Bal. Additional Paid - in - Capital 0 75760 Cash (88000-12240) 37240 Cash and land 113000 End. Bal. Working notes for addl. Paid in capital '=4800+33000-560 = 37240 2. Common Stock =6*10200*0.2 = 12240 3. Cash and land =4800+33000-560 = 37240 Accounting Equation Assets 152800 = Liabilities 27000 + Stock Holders Equity 125800 * Kindly Comment down for any clarifications/ queries and please upvote.