Question
Accurate Builders construction company was incorporated by John Davis. Assume the following activities occurred during the year: a. Received from three investors $66,000 cash and
Accurate Builders construction company was incorporated by John Davis. Assume the following activities occurred during the year:
a. Received from three investors $66,000 cash and land valued at $41,000; each investor was issued 2,000 shares of common stock with a par value of $0.10 per share.
b. Purchased construction equipment for use in the business at a cost of $40,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
c. Lent $4,500 to one of the investors, who signed a note due in six months.
d. John Davis purchased a truck for personal use; paid $5,600 down and signed a one-year note for $25,000.
e. Paid $15,000 on the note for the construction equipment in (b) (ignore interest).
Required:
1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. 2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:
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