Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Deliberate Speed Corporation (DSC) was incorporated as a private company on June 1, 2017. The companys accounts included the following at June 30, 2017: Accounts

Deliberate Speed Corporation (DSC) was incorporated as a private company on June 1, 2017. The companys accounts included the following at June 30, 2017:

Accounts Payable $ 29,000 Land $ 219,000
Factory Building 105,700 Notes Payable, due 2019 5,800
Cash 31,700 Retained Earnings 268,500
Contributed Capital 199,000 Supplies 8,900
Equipment 137,000

During the month of July, the company had the following activities:

  1. Issued 3,620 shares for $362,000 cash.
  2. Borrowed $128,000 cash from a local bank, payable June 30, 2020.
  3. Bought a factory building for $220,000; paid $101,000 in cash and signed a three-year note for the balance.
  4. Paid cash for equipment that cost $238,000.
  5. Purchased supplies for $35,700 on account.

Required: 1. Analyze transactions (a)(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.)

2. Record the transaction effects determined in requirement 1 using a journal entry format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. Summarize the journal entry effects from requirement 2 using T-accounts.

4. Prepare a classified balance sheet at July 31, 2017.

5. As of July 31, 2017, has the financing for DSCs investment in assets primarily come from liabilities or from shareholders equity?

  • Shareholders equity

  • Liabilities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Measurement And Internal Audit Operations

Authors: Andrew Fight

1st Edition

184112401X, 978-1841124018

More Books

Students also viewed these Accounting questions