SECTION A

Please chose and solve only TWO of the Exercises presented in this section:

EXERCISE 1 (20 marks)

I.

Parachutes, Inc. had the following transactions during the month of August, the first month of operations for the business:

August 10: The corporation issued 10,000 shares of capital stock to Patty Parachutes in exchange for 100,000 cash.

August 17: Purchased 70,000 of equipment; made and 20,000 down payment and signed a note payable for the balance.

August 25: Made payment of 10,000 on the amount owed for equipment.

Please show the accounting equation (i.e. state Assets, Liabilities, and Owners Equity each time):

After the transactions of August 10. (3 marks)

After the transactions of August 17. (3 marks)

After the transactions of August 25. (3 marks)