Reference no: EM133006099

Lex Systems Inc. is a computer software company that makes online public access cataloguing systems for library, business, or home use. It also has a small service department that provides initial data inputting for a fee. The company has been in business for ten years. At the end of the most recent year, the accounting records reflected total assets of $100,000 and total liabilities of $25,000.

During the current year, the following summarized events occurred:

1. Repaid $5,000 cash on a bank note borrowed in a previous year.
2. Bought a computer from a shareholder for $2,000; signed a one-year note for the liability.
3. Disposed of a printer that was obsolete (net book value of zero) by turning it in to a salvage centre; no proceeds from the disposal.
4. Purchased office equipment for $1,000; paid cash.
5. Paid a $500 cash dividend to the shareholders.
6. Made a $10,000 down payment on a $50,000 building; signed a four-year note for the remainder.
7. A shareholder sold $5,000 worth of his shares in Lex Systems Inc. to the company at cost.

Required:

Problem 1. Prepare spreadsheet for increases and decreases in each account. The first transaction is used as an example.