Question

Required information E2-16 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing a Balance Sheet, and Evaluating the Current Ratio over Time as a Bank Loan Officer LO2-4, 2-5 (The following information applies to the questions displayed below.) Bailey Delivery Company, Inc., was organized in 2018 in Wisconsin. The following transactions occurred during the year: a. Received cash from investors in exchange for 16,000 shares of stock (par value of $1.00 per share) with a market value of $11 per share. b. Purchased land in Wisconsin for $20,000, signing a one-year note (ignore interest). c. Bought two used delivery trucks for operating purposes at the start of the year at a cost of $11,000 each; paid $3,000 cash and signed a note due in three years for the rest (ignore interest). d. Paid $2,700 cash to a truck repair shop for a new motor for one of the trucks, (Increase the account you used to record the purchase of the trucks because the productive life of the truck has been improved) e. Sold one-fourth of the land for $5,000 to Pablo Development Corporation, which signed a six-month note. f. Stockholder Helen Bailey paid $29,200 cash for a vacant lot (and) in Canada for her personal use. E2-16 Part 1 Fequired: -Using the T-accounts, record the effects of transactions (a) through (f) by Bailey Delivery Company. Cash Short-Term Notes Receivable

Answer 1

Beginning Balance Common Stock Additional Paid in capital Cash Equipment (Truck) 16,000.00 Equipment (Truck) 160,000.00 Ending Balance 176,000.00 2,700.00 3,000.00 170,300.00 176,000.00 5,000.00 Beginning Balance To Land Short term Notes Receivable Ending Balance 5,000.00 5,000.00 5,000.00 Beginning Balance Short term Notes Payable Land Short term Notes Receivable 20,000.00 Ending Balance 20,000.00 5,000.00 15,000.00 20,000.00 24,700.00 Beginning Balance Long term notes payable Cash Cash Equipment Ending balance 19,000.00 3,000.00 2,700.00 24,700.00 24,700.00 Short term Notes payable Beginning Balance 20,000.00 Land 20,000.00 Ending balance 20,000.00 20,000.00 Ending balance Long term Notes payable 19,000.00 Beginning Balance Equipment 19,000.00 19,000.00 19,000.00 Ending balance Common Stock 16,000.00 Beginning Balance Cash 16,000.00 16,000.00 16,000.00 Ending balance Additional Paid in 160,000.00 Beginning Balance Cash 160,000.00 160,000.00 160,000.00