E2-16 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing a Balance Sheet, and Evaluating the Current Ratio over Time as a Bank Loan Officer LO2-4, 2-5

[The following information applies to the questions displayed below.]

Bailey Delivery Company, Inc., was organized in 2018 in Wisconsin. The following transactions occurred during the year:

1. Received cash from investors in exchange for 18,000 shares of stock (par value of $1.00 per share) with a market value of $9 per share.
2. Purchased land in Wisconsin for $19,000, signing a one-year note (ignore interest).
3. Bought two used delivery trucks for operating purposes at the start of the year at a cost of $12,000 each; paid $2,000 cash and signed a note due in three years for the rest (ignore interest).
4. Paid $3,000 cash to a truck repair shop for a new motor for one of the trucks. (Increase the account you used to record the purchase of the trucks because the productive life of the truck has been improved)
5. Sold one-fourth of the land for $4,750 to Pablo Development Corporation, which signed a six-month note.
6. Stockholder Helen Bailey paid $28,200 cash for a vacant lot (land) in Canada for her personal use.

E2-16 Part 3

3. Prepare a classified balance sheet for Bailey Delivery Company at December 31, 2018.

BAILEY DELIVERY COMPANY, INC. Balance Sheet Assets Liabilities Current assets: Current liabilities: Cash Total current liabilities 0 Total current assets Total liabilities 0 Non-current assets: Stockholders' Equity Total non-current assets Total assets o Total stockholders' equity 0 Total liabilities and stockholders' equity 0 $