Assume Down.com was organized on May 1, to compete with Despair.com—a company th
ID: 2605906 • Letter: A
Question
Assume Down.com was organized on May 1, to compete with Despair.com—a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com's operations.
Assume Down.com was organized on May 1, to compete with Despair.com—a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com's operations.
Assume Down.com was organized on May 1, to compete with Despair.com-a company that sells de- motivational posters and office products. The following events occurred during the first month of Down.com's operations a. Received $32,000 cash from the investors who organized Down.com Corporation. b. Borrowed $17,000 cash and signed a note due in two years c. Ordered equipment costing $14,000 d. Purchased $8,000 in equipment, paying $2,000 in cash and signing a six-month note for the balance e. Received the equipment ordered in (c), paid for half of it, and put the rest on account. value: Require 0.50 points Required: 1. Summarize the financial effects of items (a)-(e) in a table. (Enter any decreases to account balances with a minus sign.) Stockholders Equity Common Stock Assets Liabilities Accounts ST Notes LT Notes Payable Cash Equipment Payable Payable Beg 0 0 0 EndExplanation / Answer
Answer
Assets
=
Liabilities
+
Stockholder's Equity
Cash
Equipment
Accounts Payable
ST Notes Payable
LT Notes Payable
Common Stock
Beg.
a.
32,000
32,000
b.
17,000
17,000
c.
d.
(2,000)
8,000
6,000
e.
(7,000)
14,000
7,000
End
40,000
22,000
=
7,000
6,000
17,000
32,000
Notes
Assets
=
Liabilities
+
Stockholder's Equity
Cash
Equipment
Accounts Payable
ST Notes Payable
LT Notes Payable
Common Stock
Beg.
a.
32,000
32,000
b.
17,000
17,000
c.
d.
(2,000)
8,000
6,000
e.
(7,000)
14,000
7,000
End
40,000
22,000
=
7,000
6,000
17,000
32,000
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