number
Stockholder's Equity
Assets = Liabilities + Common Stock + Retained Earnings
1. 50,000 NA 50,000 NA
2.
3.
4.
5.
6.
Total
Event
number
Stockholder's Equity
Assets = Liabilities + Common Stock + Retained Earnings
1. 50,000 NA 50,000 NA
2. 25,000 25,000 NA NA
3. 38,000 NA NA 38,000
4. (32,000) NA NA (32,000)
5. (2,500) NA NA (2,500)
6. NA NA NA NA
Total 78,500 25,000 50,000 3,500
References
Essay Difficulty: 2 Medium Learning Objective: 01-04 Show how business events affect the
accounting equation.
46.
Award: 10.00 points
At the beginning of Year 2, Grace Company's accounting records had the general ledger accounts and balances shown in the table below. During Year 2, the
following transactions occurred:
1. Received $95,000 cash for providing services to customers
2. Paid salaries expense, $50,000
3. Purchased land for $12,000 cash
4. Paid $4,000 on note payable
5. Paid operating expenses, $22,000
6. Paid cash dividend, $2,500
Required:
a. Record the transactions in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the retained earnings
column. Enter 0 for items not affected.
Provide appropriate titles for these accounts in the last column of the table.
Event
Assets Liabilities Stockholder's Equity
Accounts Titles for RE Cash Land = Notes Payable + Common Stock +
Retained
Earnings
Beginning 29,000 32,000 18,000 33,000 10,000
1
2
3
4
5
6
b. What is the amount of total assets as of December 31, Year 2?
c. What is the amount of total stockholders' equity as of December 31, Year 2?
a.
Event
Assets Liabilities Stockholder's Equity
Accounts Titles for RE Cash Land = Notes Payable + Common Stock +
Retained
Earnings
Beginning 29,000 32,000 18,000 33,000 10,000
1 95,000 0 0 0 95,000 Service Revenue
2 (50,000) 0 0 0 (50,000) Salaries Expense
3 (12,000) 12,000 0 0 0
4 (4,000) 0 (4,000) 0 0
5 (22,000) 0 0 0 (22,000) Operating Expense
6 2,500 0 0 0 (2,500) Dividend
b. Total assets = Ending Cash of $33,500 + Ending Land of $44,000 = $77,500
c. Total stockholders' equity = $33,000 + $30,500 = $63,500
References
Essay Difficulty: 2 Medium Learning Objective: 01-10 Record business events using a horizontal
financial statements model.
47.
Award: 10.00 points
48.
Award: 10.00 points
Montgomery Company experienced the following events during Year 1 (all were cash events):
1. Issued a note
2. Paid operating expenses
3. Issued common stock
4. Provided services to customers
5. Repaid part of the note in event number 1
6. Paid dividends to stockholders
Required:
Indicate how each of these events affects the accounting equation by writing the letter I for increase, the letter D for decrease, and NA for not affected under
each of the components of the accounting equation. Use only one item of entry in each column. The first event is done for you as an example.