Question

Required information E2-9 (Algo) Analyzing the Effects of Transactions in T-Accounts LO2-4 [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 $86,000 cash from the six investors; each investor was issued 10,000 shares of common stock with a par value of $0.10 per share. b. Purchased equipment for use in the business at a cost of $34,000; 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 $280 per week for cleaning the corporate offices next year. d. Received an additional contribution from investors who provided $4,600 in cash and land valued at $31,000 in exchange for 2,600 shares of stock in the company. e. Lent $4,100 to one of the investors, who signed a note due in six months. f. Bennett Griffin borrowed $8,600 for personal use from a local bank, signing a one-year note.

Answer 1

a) d) End. Bal. Cash $ 86,000.00 $ 6,500.00 b) $ 4,600.00 $ 4,100.00 e) $80,000.00 e) End. Bal. Notes Receivable $4,100.00 $4,100.00 b) End. Bal. Equipment $ 26,000.00 $ 26,000.00 d) End. Bal. Land $31,000.00 $31,000.00 Notes Payable $ 19,500.00 b) $ 19,500.00 Common Stock $6,000.00 a) $ 260.00 d) $6,260.00 Additional Paid in Capital $ 80,000.00 a) $ 35,340.00 d) $1,15,340.00 End. Bal. End. Bal. End. Bal.

Note: There will be no entry for c and f.

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