Lakeshore Cottages was incorporated as a private company on January 1, 2014. The company's accounts included the

Question:

Lakeshore Cottages was incorporated as a private company on January 1, 2014. The company's accounts included the following at January 31, 2014:

Accounts Payable Buildings Cash Contributed Capital Equipment Land Notes Payable Retained Earnings Supplies $156,000 $14

During the month of February, the company had the following activities:
a. Borrowed $150,000 cash from a local bank, payable June 30, 2017.
b. Repaid $250,000 cash to a local bank.
c. Issued 1,500 shares for $150,000 cash.
d. Purchased equipment for $30,000, paying $3,000 in cash and signing a note due in six months for the balance.
e. Purchased supplies for $30,000 on account.
Required:
1. Analyze transactions (a) through (e) to determine their effects on the accounting equation. Use the format shown in the demonstration case.
2. Record the transaction effects determined in requirement 1 using a journal entry format.
3. Summarize the journal entry effects from requirement 2 using T-accounts.
4. Prepare a classified balance sheet at February 28, 2014. 5. As of February 28, 2014, has the financing for Lakeshore Cottages' investment in assets primarily come from liabilities or from shareholders' equity?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...