Please answer the following Accounting questions showing all

Please answer the following Accounting questions showing all work and steps needed to complete it.

5. Balance Sheet Stephen decides to start his own business and makes the following transactions 1. 2. 3. 4. Contribute $200 in cash as initial capital Borrows $700 from his dad Buys machine worth $700 on cash Buys some raw materials on credit worth $500 What side(s) of the balance sheet does each event affect? Remember Assets Liabilities + Shareholders\' Equity. To help you get started, I have answered the first one for you. Transaction Assets $200 cash Liabilities Equity S200 owners claim (equit 4 6. Balance Sheet At the end of the fiscal year, Wolverine, Inc. had the following balances in its asset, liabilities, nd stockholders\' equity accounts Accounts payable: $60,000 Accounts receivable: $90.000 Capital stock: $100,000 Cash: $40,000 Land: $80,000 Building: S50,000 Equipment: $30,000 · . Notes payable: $20,000 Instructions: 1. 2. Group these accounts into Assets, Liabilities, and Equity Now sum all of these groups. If this were a balance sheet, would it balance? Remember, Assets Liabilities+Stockholders\' Equity 3. What would be the value of retained earnings to get Assets to equal Liabilities-+ Stockholders Equity?

Solution

5 Transactio Assets liabilities Equity 1 200 200 2 700 700 3 0 4 500 500 (for transaction 3 the net effect is 0 because machine- asset will increase whereas cash-asset will decrease with same amount) 6 1) Accounts payable 60,000 liabilities Accounts receivable 90,000 assets Capital Stock 100,000 Stockholder\'s equity cash 40,000 assets land 80,000 assets Building 50,000 assets Equipment 30,000 assets Notes payable 20,000 liabilities 2) Assets liabilities Equity Accounts receivable 90,000 Accounts payable 60,000 capital stock 100,000 cash 40,000 Notes payable 20,000 land 80,000 Building 50,000 Equipment 30,000 total 290,000 total 80,000 100,000 Balance sheet always balance , however the above does not balance because the retained earnings is missing 3) Retained earnings will be 290,000 - 80,000 -100,000 110000