Scott, Kim and Koko organized the SKK Corporation on January 1, 20A. Each of the

Question

Scott, Kim and Koko organized the SKK Corporation on January 1, 20A. Each of these owners invested $27,000 cash and received shares of stock. Below are selected transactions that were completed during January. Sold stock to the owners. Borrowed $70,000 on one-year note payable. Purchased land by signing a $30,000 note payable. Purchased two service vehicles, $18,000 each on credit. Paid $10,000 of accounts payable. Purchased $12,000 of supplies on credit. SKK uses a Supplies Inventory account. Prepare the appropriate Journal Entries and complete the following table based only on the 6 transactions above: Assets $ Liabilities $ Stockholders' equity $

Explanation / Answer

Serial No. Account Title & Explanations Debit($) Credit ($) 1 Cash 81000 common stock 81000 (sold stock to owners) 2 Cash 70000 Notes Payable 70000 (borrowed $70000 against notes payable) 3 Land 30000 Notes Payable 30000 (purchase of land signing notes payable) 4 Service Vehicle 36000 Accounts payable 36000 (purchase of service vehicle on account) 5 Accounts payable 10000 Cash 10000 (payment of accounts payable) 6 Supplies Inventory account 12000 Accounts payable 12000 (purchase of supplies on account) Asset Current assets: Cash 141000 Supplies Inventory 12000 Total Current Assets 153000 Non Current Assets Land 30000 Service Vehicles 36000 Total Non Current Assets 66000 Total Assets 219000 Liabilities Current Liabilities Accounts payable 38000 One year Notes payable 70000 Total current assets 108000 Non Current Assets Notes payable 30000 Stock Holder's equity Common Stock 81000 Total Liabilities % Stockholder's equity 219000

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