problem 2.3A

70 Chapter 2 Basic Financial Statements Goldstar Communications was organized on December 1 of the current year and had the following account balances at December 31, listed in tabular form: LO3 PROBLEM 2.3A Recording the Effects of Transactions Owners Equity Assets Liabilities Office Notes Accounts Payable Payable Capital Stock Cash Land Building Equipment + + + + + Balances $37.000 $95,000 $125,000 $51,250 $80,000 $28,250 $200,000 Early in January, the following transactions were carried out by Goldstar Communications: 1. Sold capital stock to owners for $35,000 2. Purchased land and a small office building for a total price of $90,000, of which $35,000 was the value of the land and $55,000 was the value of the building. Paid $22,500 in cash and signed a note payable for the remaining $67,500. 3. Bought several computer systems on credit for $9,500 (30-day open account). 4. Obtained a loan from Capital Bank in the amount of $20,000. Signed a note payable. 5. Paid the $28,250 account payable due as of December 31. Instructions a. List the December 31 balances of assets, liabilities, and owners' equity in tabular form as shown. b. Record the effects of each of the five transactions in the format illustrated in Exhibit 2-11. Show the totals for all columns after each transaction. The items making up the balance sheet of Rankin Truck Rental at December 31 are listed below in tabular form similar to the illustration of the accounting equation in Exhibit 2-11, L03 PROBLEM 2.4A An Alternate Problem on Recording the Effects of Transactions Owners