Assume Downcom was organized on May 1 to compete with Despai

Assume Down.com was organized on May 1, to compete with Despair.com—a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com\'s operations.

Assume Down.com was organized on May 1, to compete with Despair.com—a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com\'s operations.

Assume Down.com was organized on May 1, to compete with Despair.com-a company that sells de- motivational posters and office products. The following events occurred during the first month of Down.com\'s operations a. Received $32,000 cash from the investors who organized Down.com Corporation. b. Borrowed $17,000 cash and signed a note due in two years c. Ordered equipment costing $14,000 d. Purchased $8,000 in equipment, paying $2,000 in cash and signing a six-month note for the balance e. Received the equipment ordered in (c), paid for half of it, and put the rest on account. value: Require 0.50 points Required: 1. Summarize the financial effects of items (a)-(e) in a table. (Enter any decreases to account balances with a minus sign.) Stockholders Equity Common Stock Assets Liabilities Accounts ST Notes LT Notes Payable Cash Equipment Payable Payable Beg 0 0 0 End

Solution

Answer

Assets

=

Liabilities

+

Stockholder\'s Equity

Cash

Equipment

Accounts Payable

ST Notes Payable

LT Notes Payable

Common Stock

Beg.

a.

         32,000

                             32,000

b.

         17,000

     17,000

c.

d.

         (2,000)

           8,000

        6,000

e.

         (7,000)

       14,000

        7,000

End

         40,000

         22,000

=

        7,000

        6,000

     17,000

                             32,000

Notes

	Assets	=	Liabilities	+	Stockholder\'s Equity
	Cash	Equipment		Accounts Payable	ST Notes Payable	LT Notes Payable		Common Stock
Beg.
a.	32,000							32,000
b.	17,000					17,000
c.
d.	(2,000)	8,000			6,000
e.	(7,000)	14,000		7,000
End	40,000	22,000	=	7,000	6,000	17,000		32,000