Analyze the accounting equation effects of the transactions in M2-13 using the format shown in the chapter, and compute total assets, total liabilities, and total shareholders' equity.
In M2-13
J.K. Builders was incorporated on July 1, 2014. Prepare journal entries for the follow- ing events from the first month of business. If the event is not a transaction, write "no transaction."
a. Received $70,000 cash invested by owners and issued shares.
b. Bought an unused field from a local farmer by paying $60,000 cash. As a construction site for smaller projects, it is estimated to be worth $65,000 to J.K. Builders.
c. A lumber supplier delivered lumber supplies to J.K. Builders for future use. The lumber supplies would have normally sold for $10,000, but the supplier gave J.K. Builders a 10 percent discount. J.K. Builders has not yet received a bill from the supplier.
d. Borrowed $25,000 from the bank with a plan to use the funds to build a small workshop in August. The loan must be repaid in two years.
e. One of the owners sold $10,000 worth of his shares to another shareholder for $11,000.