Questions 57 of 10 The following information applies to the

Questions 5-7 (of 10) The following information applies to the questions displeyed below/ Mulkeen Service Company, Inc. was incorporated by Conor Mulkeen and five other manegers. The tollowing actvtes occurred during the yeer a. Recelved $74,000 cash from the managers; each was issued 2.200 shares of common stock b. Purchased equlpment for use in the business at a cost of $16.200. one-fourth was paid in cash and the company signed a note for the belance (due in six months signed an agreement with a cleaning service to pay it $135 per week for cleaning the corporate oleer beginning next year. d. Conor Muikeen borrowed $28,000 for personal use from a local bank, signing a one year note value 10.00 points Required: 1. For each of the above transactions, record its effects in the appropriate T-accounts Assume all beginning balances are zero Cash Bal Beg Bal End Bal End Bal Note Payable Common Stock Beg Bal Beg Bal. End Ba End Bal

Solution

a. Common stock

Cash

Equipment

Notes payable

b. Assets $86150 = liabilities $12150 + stockholder\'s equity $ 74000

c. The agreement in (C) involves no exchange or receipt of cash , goods or services and thus is not yet a transaction. It involves no liabilities in current year

d. Transaction (d) occurs between the owner and the other ,the separate entity assumption implies this transaction does not affect the business , business transaction should be recorded separately from its owner

To Balance c/d	74000	By Cash	74000