Swish Watch Repair Company owned by Jacob Swish repairs expensive watches for customers. The company has been in business for three years. At the end of the most recent year, 2009, the accounting records reported total assets of $2,255,000 and total liabilities of $1,780,000. During the current year, 2010, the following summarized events occurred:
(a) Received an additional investment of $109,000 cash from Jacob Swish.
(b) Borrowed $186,000 cash from the bank and signed a 10-year note.
(c) Jacob Swish borrowed $85,000 from a local bank to acquire his summer cottage.
(d) Built an addition on the factory for $200,000 and paid cash to the construction company. LO1, 2
(e) Purchased equipment for the new addition for $44,000 and supplies for $18,000, paying $12,000 in cash and signing a six-month note for the balance.
(f) Returned a $4,000 piece of equipment, from (e) because it proved to be defective; received a cash refund.
Required:
1. Complete the spreadsheet that follows, using plus ( + ) for increases and minus ( ˆ’ ) for decreases for each account. The first transaction is used as an example.

2. Did you include event (c) in the spreadsheet? Why?
3. Based on beginning balances plus the completed spreadsheet, provide the following amounts (show computations):
a. Total assets at the end of the year.
b. Total liabilities at the end of the year.
c. Total owner's equity at the end of the year.
4. As of December 31, 2010, has the financing for Swish Watch Repairs' assets primarily come from liabilities or owner's equity?

Transcribed Image Text:

Assets Liabilities +Owner's Equity -Cash- Supplies Land Equipment BuildingNotes Payable (a) +109,000 J. Swish, Capital +109,000 .