Question

Required information PA2-2 Recording Transactions (in a Journal and T-Accounts); Preparing a Trial Balance; Preparing and Interpreting the Balance Sheet (LO 2-2, LO 2-3, LO 2-4, LO 2-5) (The following information applies to the questions displayed below) Deliberate Speed Corporation (DSC) was incorporated as a private company. The company's accounts included the following at June 30: Accounts Payable Buildings Cash Common Stock Equipment Land Notes Payable (long-term) Retained Earnings Supplies $ 21,100 144,000 55,500 220,000 143,000 275,000 6, 700 385,800 16,100 During the month of July, the company had the following activities: a. Issued 4,400 shares of common stock for $440,000 cash. b. Borrowed $121,000 cash from a local bank, payable in two years, c. Bought a building for $229,750; paid $88,750 in cash and signed a three-year note for the balance. d. Pald cash for equipment that cost $226,000. e. Purchased supplies for $54,750 on account.

Answer 1

1: Journal Entries:
Date	Acc Titles	Debit $	Credit $
a	cash	440000
	Common Stock		440000
	(issue of stock for cash)
b	Cash	121000
	Note Payable		121000
	(borrowing from bank for 2 years)
c	Building	229750
	Cash		88750
	Note payable		141000
	(building bought paid cash and signing note)
d	Equipment	226000
	Cash		226000
	(bought equipment for cash)
e	Supplies	54750
	Acc Payable		54750
	(purchased supplies on account)
2: T-Accounts:
DEBIT	AMOUNT $	CREDIT	AMOUNT $
Accounts Payable a/c
CB	75850	OB	21100
		e	54750
Buildings A/c
OB	144000	CB	373750
c	88750
c	141000
Cash a/c
OB	55500	c	88750
a	440000	d	226000
b	121000	CB	301750
Common Stock a/c
CB	660000	OB	220000
		a	440000
Equipment a/c
OB	143000	CB	369000
d	226000
Land a/c
OB	275000
Notes payable LT a/c
CB	268700	OB	6700
		b	121000
		c	141000
Retained Earnings a/c
		OB	385800
Supplies a/c
OB	16100	CB	70850
e	54750
3: Trial Balance
Acc Titles	Debit $	Credit $
Account Payable		75850
Buildings	373750
Cash	301750
Common Stock		660000
Equipment	369000
Land	275000
Notes Payable		268700
Retained Earnings		385800
Supplies	70850
Total	1390350	1390350
4: Balance Sheet:
Assets:
Cash	301750
Supplies	70850
current Assets	372600
Land	275000
Buildings	373750
Equipments	369000
Total Assets	1390350
Liabilities & SH Eq.:
Acc Payable	75850
current liabilities	75850
Notes Payable LT	268700
SH Equity:
common stock	660000
Retained Earnings	385800
Total Liab. & SH Eq.	1390350