During its first week of operations, January 1-7, 2010, Home Comfort Furniture, a sole proprietorship owned by Sara Baine, completed six transactions with the dollar effects indicated in the following schedule:

Required:
1. Write a brief explanation of transactions (a) through (f). Explain any assumptions that you made.
2. Compute the ending balance in each account and prepare a classified balance sheet for Home Comfort Furniture on January 7, 2010.
3. As of January 7, 2010, has most of the financing for Home Comfort's assets come from liabilities or owner's equity?

Transcribed Image Text:

-LiabilitiesOwner's Equity LandNotes Payable S. Baine, Capital Assets Cash Equipment Beginning $0$ 0 $0-$ a. 12,000 b. +50,000 4,000 d. 4,000 +12,000 +50,000 +12,000 8,000 - + 4,000 7,000 7,000 3,000 3,000 Ending