Preston Auto Paint Company had the temporary free use of an old building and completed the following transactions in September 1999;

Required

Prepare a summary of transactions (see Part A of Illustration 1.3) for the company for these transactions. Use money columns headed Cash, Accounts Receivable, Equipment, Accounts Payable, Capital Stock, and Retained Earnings. Determine balances after each transaction to show that the basic accounting equation balances.

Transcribed Image Text:

Sept. 1 The company was organized and received $100,000 cash from the issuance of capital stock. 5 The company bought painting and sanding equipment for cash at a cost of $25,000. 7 The company painted the auto fleet of a customer who agreed to pay $8,000 in one week. The customer furnished the special paint. 14 The company received the $8,000 from the transaction of September 7. 20 Additional sanding equipment that cost $2,800 was acquired today; payment was postponed until September 28. 28 $2,400 was paid on the liability incurred on September 20. 30 Employee salaries for the month, $2,200, were paid. 30 Placed an order for additional painting equipment advertised at $20,000.