Question
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:
- Issued 3,620 shares for $362,000 cash.
- Borrowed $128,000 cash from a local bank, payable June 30, 2020.
- Bought a factory building for $220,000; paid $101,000 in cash and signed a three-year note for the balance.
- Paid cash for equipment that cost $238,000.
- 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?
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Shareholders equity
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Liabilities
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