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Home Comfort Furniture Company completed four transactions, with the dollar effects indicated in the following schedule: Assets = Liabilities + Stockholder's Equity Cash Equipment Notes
Home Comfort Furniture Company completed four transactions, with the dollar effects indicated in the following schedule:
Assets | = | Liabilities | + | Stockholder's Equity | ||
Cash | Equipment | Notes Payable | Common Stock | |||
Beginning | 0 | 0 | = | 0 | 0 | |
(1) | +12,000 | = | +12,000 | |||
(2) | +50,000 | = | +50,000 | |||
(3) | -4,000 | +12,000 | = | +8,000 | ||
(4) | +4,000 | = | +4,000 | |||
Ending | (A) | (B) | = | (C) | (D) |
1. Write a brief explanation of transactions (1) through (4). Explain your assumptions for each.
2. Compute the ending balances for (A) through (D).
3. Has most of the financing for Home Comfort's investments in assets come from liabilities or stockholders' equity? Explain your answer.
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