THE DEBITICREDIT FRAMEWORK Prepare journal entries for each transaction and ensure that the accounting equation is still in balance. (a) Stockholder invests $10,000 into the business. Debit and credit the accounts affected Ensure the equation still balances and debits = credits Assets Liabilities + Stockholders' Equity (b) Borrow $15,000 signing a note payable to the bank that is due in three months. Debit and credit the accounts affected Ensure the equation still balances and debits -credits Assets Liabilities + Stockholders' Equity (c) Acquire a $15,000 truck and $5,000 worth of equipment. Debit and credit the accounts affected Ensure the equation still balances and debits = credits Assets Liabilities + Stockholders' Equity (d) Purchase $300 worth of supplies on credit. Debit and credit the accounts affected Ensure the equation still balances and debits -credits Assets Liabilities Stockholders' Equity (e) Sign contract for first website design for $10,000. Debit and credit the accounts affected Ensure the equation still balances and debits -credits Assets Liabilities Stockholders' Equity (1) Company pays off $300 Accounts Payable. Debit and credit the accounts affected Ensure the equation still balances and debits = credits Assets Liabilities + Stockholders' Equity (8) Company pays for and receives $600 worth of supplies. Debit and credit the accounts affected Ensure the equation still balances and debits - credits Assets Liabilities Stockholders' Equity (h) Company acquires and receives $1,000 worth of equipment. Debit and credit the accounts affected Ensure the equation still balances and debits -credits Assets Liabilities + Stockholders' Equity (i) Order a $900 computer, to be delivered in 90 days. Debit and credit the accounts affected Ensure the equation still balances and debits = credits Assets Liabilities + Stockholders' Equity 2 HW 2.2 POSTING TO T-ACCOUNTS Post the transactions from HW 2-1 and determine the ending balances of each of the following T- accounts. Assets Liabilities Stockholders' Equity + Cash- - Accounts Payable + Contributed Capital + + Supplies - - Notes Payable + - Retained Earnings + + Equipment - PREPARING A BALANCE SHEET Use the ending balances from the T-accounts on HW 2-2 to prepare a classified balance sheet as of December 31, 2010 At December 31, 2010 CURRENT RATIO Refer to the classified balance sheet from HW 2-3 and calculate the current ratio of World Wide Webster as of December 31, 2010. Then, interpret the current ratio. Calculation: Interpretation: 2-6
