Reference no: EM132536717

Question - Duane Schmidt opened a small café, which he called Schmidt's Café. During the first week, he completed the following transactions:

a. Sold a personal investment in Fork Motor Co. stock and deposited $100,000 of the proceeds in a bank account opened in the name of Schmidt's Café.

b. Purchased an old building converted into the café for $85,000.

c. Purchased food and beverages for $3,000 on account from Jerry's Wholesale Food Co.

d. Sold meals for $150 total cash to Randall Construction Co. The entire amount was paid by Jim Randall. The cost of the food and beverages sold was $50.

e. Paid the cook $50 for one day's work.

Required -

1. Arrange the following asset, liability, and proprietorship titles in an expanded accounting equation like that shown in the chapter: Cash, Food and Beverage Inventory, Building, Accounts Payable (Jerry's Wholesale Food Co.), Duane Schmidt, Capital.

2. Show by additions and subtractions the effects of each transaction on the assets, liabilities, and proprietorship of Schmidt's Cafe. Show net totals for all items after each transaction.