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Laser Delivery Services, Incorporated (LDS), was incorporated January 1. The following transactions occurred during the year:

1. Received $38,000 cash from the company's founders in exchange for common stock.
2. Purchased land for $11,500, signing a two-year note (ignore interest).
3. Bought two used delivery trucks at the start of the year at a cost of $14,000 each; paid $4,500 cash and signed a note due in three years for $23,500 (ignore interest).
4. Paid $1,300 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks.
5. Stockholder Jonah Lee paid $270,000 cash for a house for his personal use.

3. Show the effects of the journal entries by account, using T-accounts.

4. Prepare a classified balance sheet for Laser Delivery Services at December 31. Include Retained Earnings on the balance sheet even though the account has a zero balance.

5. Using the balance sheet, indicate whether Laser Delivery Services's assets at the end of the year were financed primarily by liabilities or stockholders' equity.

multiple choice

• Liabilities

• Stockholders' Equity