Accounting Equation Noylot Corporation reported the following balance sheet amounts at December 1, 2001:

Noylot Corporation had the following transactions during December 2001:
. Inventory costing $34,000 was purchased on account.
. Depreciation expense of $21,000 was recorded.
. Wages payable of $16,000 were paid.
. Accounts receivable in the amount of $65,000 were collected.
. A total of 2,000 new shares of common stock was issued at $12 each. The stock has a par value of $5 per share.
6. Prepaid insurance of $2,000 expired during December.
7. Salary and wage expenses of $15,000 were paid in cash during December.
8. Inventory that cost $40,000 was sold on credit for $70,000.

a. Analyze the effects of each transaction on the accounting equation (A = L + SE) for Noylot Corporation.

b. Prepare a classified balance sheet at December 31, 2001, that incorporates the effects of the above transactions.

Transcribed Image Text:

Noylot Corporation Balance Sheet December 1, 2001 Cash Accounts receivable (net) Inventory Prepaid insurance $ 73,000 136,000 108.000 20,000 Land 40,000 Buildings and equipment $410,000 Less accumulated depreciation (170,000) 240,000 Total assets $617,000 Accounts payable $ 43.000 Wages payable 21,000 Bonds payable 250,000 Common stock 25,000 Additional paid-in capital Retained earnings Total liabilities and owners' equity 20,000 258,000 $617,000