4.6 Evaluate the effects of each transaction by constructime a and a liabilities

Question

4.6 Evaluate the effects of each transaction by constructime a and a liabilities + net worth side Transaction (a) Eastwood Construction is organized with a capital stock osu (b) Bought from Culpepper Co. on credit $100.000 of (c) Borrowed $80,000 cash from First National Bank (d) Paid Culpepper $30,000 on account. (e) Returned $10,000 of defective material to Cuipepper (f) Loaned $50,000 to Robert Gondring (g Paid $20,000 cash for building site (h) Erected a building at a cost of $120,000 cash ) Borrowed $70,000 from Friendly Insurance, giving a morigage iorouliaenal (Hints: Find the T-account balances for these titles Cast Accoums Recei & Building, Accounts Payable, Notes Payahle, Morigage and Capia Soa the balance sheet.)

Explanation / Answer

Workings

Eastwood Manufacturing Balance Sheet Assets Liabilities and NetWorth Cash 180000 Account Payable 60000 Inventory 90000 Notes Payable 80000 Building 140000 Mortage 70000 Loan to Rober Gondring 50000 NetWorth Capital Stock 250000 Total 460000 Total 460000

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