Required information PA2-2 (Algo) Recording Transactions (in a Journal and T-Accounts); Preparing a Trial Balance; Preparing and Interpreting the Balance Sheet [LO 2-1, LO 2-2, LO 2-3, LO 2-4, LO 2-5] [The following information applies to the questions displayed below.] Deliberate Speed Corporation (DSC) was incorporated as a private company. The company's accounts included the following at June 30: Accounts Payable Buildings $ 20,900 109,000 Cash 38,500 Common Stock 195,000 Equipment 142,000 Land 214,000 Notes Payable (long- 4,350 term) Retained Earnings 293,850 Supplies 10,600 During the month of July, the company had the following activities: a. Issued 4,900 shares of common stock for $490,000 cash. b. Borrowed $117,000 cash from a local bank, payable in two years. c. Bought a building for $267,250; paid $93,250 in cash and signed a three-year note for the balance. d. Paid cash for equipment that cost $275,000. e. Purchased supplies for $53,250 on account. PA2-2 (Algo) Part 1 Required: 1. Analyze transactions (a)-(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.) Assets Cash Supplies Buildings Equipment Land Beginning Balance a. 38,500 10,600 109,000 142,000 214,000 b. C. d. e. Ending Balance Liabilities Accounts Notes Payable Payable 20,900 4,350 + Stockholders' Equity Common Retained Stock Earnings 195,000 293,850 + + + ++ PA2-2 (Algo) Part 2 2. Record the transaction effects determined in part 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.) View transaction list Journal entry worksheet < 1 2 3 4 5 Issued 4,900 shares of common stock for $490,000 cash. Record the transaction. Note: Enter debits before credits. Transaction a General Journal Debit Credit Record entry View general journal Clear entry > PA2-2 (Algo) Part 3 3. Summarize the journal entry effects from part 2 using T-accounts. Cash Supplies Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Equipment Buildings Debit Credit Debit Credit Beginning Beginning Balance Balance Ending Balance Ending Balance Land Accounts Payable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Notes Payable Common Stock Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Retained Earnings Debit Credit Ending Balance 4. Prepare a trial balance at July 31. Totals DELIBERATE SPEED CORPORATION Trial Balance Debit Credit PA2-2 (Algo) Part 5 5. Prepare a classified balance sheet at July 31. DELIBERATE SPEED CORPORATION Balance Sheet PA2-2 (Algo) Part 6 6. As of July 31, has the financing for Deliberate Speed Corporation's (DSC's) investment in assets primarily come from liabilities or stockholders' equity? Multiple Choice Liabilities Stockholders' Equity