The Standard Manufacturing Corporation is organized on January 1, 1979. During January 1979, the following transactions occur:

(1) The corporation issues 10,000 shares of $10-par value common stock for $180,000 in cash.

(2) The corporation issues 30,000 shares of common stock in exchange for land, building, and equipment. The land is to be stated at $100,000, the building at $260,000, and the equipment at $180,000.

(3) The corporation issues 1,000 shares of common stock to an attorney in payment of legal services rendered in obtaining the corporate charter.

(4) Raw materials costing $85,000 are acquired on account from various suppliers.

(5) Manufacturing equipment with a list price of $5,000 is acquired. After deducting a

$500 discount, the net amount is paid in cash.

(6) Freight charges of $250 for delivery of the equipment in (5) are paid in cash.

(7) Raw materials costing $600 are found to be defective and returned to the supplier for full credit. The raw materials had been purchased on account [see (4)], and no payment had been made as of the time that the goods were returned.

(8) A contract is signed for the rental of a fleet of automobiles beginning February 1, 1979. The rental for February of $1,200 is paid in advance.

(9) Invoices for $50,000 of raw materials purchased in (4) are paid, after deducting a discount of 2 percent for prompt payment.

(10) Fire and liability insurance coverage is obtained from Midwest Insurance Company.

The |-year policy, beginning February 1, 1979, carries a $360 premium, which has not yet been paid.

(11) A contract is signed with a customer for $10,000 of merchandise that Standard plans to manufacture. The customer advanced $3,500 toward the contract price.

(12) A warehouse costing $50,000 is acquired. A down payment of $5,000 is made, and a long-term mortgage is assumed for the balance.

(13) Raw materials inventory with a list price of $1,000 is found to be defective and returned to the supplier. This inventory has already been paid for in (9). The returned raw materials are the only item purchased from this particular supplier during January 1979.

(14) The firm purchased 5,000 shares of $10-par value common stock of the General Electronics Corporation for $85,000. This investment is made as a short-term investment of excess cash. The shares of General Electronics Corporation are traded on the New York Stock Exchange.

The following assumptions will help you resolve certain accounting uncertainties: (1) Transactions (2) and (3) occurred on the same day as transaction (1). (ii) The invoices paid in (9) are the only purchases for which discounts were made available to the purchaser.

a Enter these transactions in T-accounts. Indicate whether each account is an asset, liability, or owners’ equity item. Cross-reference each entry to the appropriate transaction number.

b_ Prepare a balance sheet as of January 31, 1979.