PA2-1 (Algo) Determining Financial Statement Effects of Various Transactions [LO 2-1, LO 2-2, LO 2-5] Mallard Incorporated (MI) is a small manufacturing company that makes model trains to sell to toy stores. It has a small service department that repairs customers' trains for a fee. The company has been in business for five years. At the end of the previous year, the accounting records reflected total assets of $600,000 and total liabilities of $250,000. During the current year, the following summarized events occurred: a. Issued additional shares of common stock for $120,000 cash. b. Borrowed $129,000 cash from the bank and signed a 10-year note. c. Built an addition on the buildings for $232,000 and paid cash to the contractor. d. Purchased equipment for the new addition for $47,500, paying $4,750 in cash and signing a note for the balance due in two years. e. Returned a $4,750 piece of equipment, from (d), because it proved to be defective: received a reduction of the notes payable. Purchased a delivery truck (equipment) for $10,250; paid $7175 cash and signed a two-year note for the remainder. g. A stockholder sold $5,450 of his stock in Mallard Incorporated to his neighbor. Required: 1. Complete the spreadsheet that follows. The first transaction is used as an example. 3. Based on beginning balances plus the completed spreadsheet, provide the Total assets, liabilities and stockholders' equity at the end of year. 4. As of the current year-end, has the financing for Mallard Incorporated's (MI's) investment in assets primarily come from liabilities or stockholders' equity? Assets Cash Equipment Buildings Liabilities Notes Payable 5 + a. 120,000 b. (129,000) = 129,000 + s Stockholders' Equity Common Stock 120,000 Retained Earnings + C. 232,000 232,000 = + d. 4,750 47,500 = 42,750 + 0. 4,750 4,750 + f. 7,175 10,250 3,075 + 9- + Change in 234,925 62,500 232,000 = 179,575 + 120,000 0 Based on beginning balances plus the completed spreadsheet, provide the Total assets, liabilities and stockholders' equity at the end of year. a. Total assets at the end of the year. b. Total liabilities at the end of the year. c. Total stockholders' equity at the end of the year. Amount < Required 1 Required 4 >