Reference no: EM13878912
Deliberate Speed Corporation (DSC) was incorporated as a private company. The company's accounts included the following at June 30:
During the month of July, the company had the following activities:
a. Issued 4,000 shares of common stock for $ 400,000 cash.
b. Borrowed $ 100,000 cash from a local bank, payable in two years.
c. Bought a building for $ 182,000; paid $ 82,000 in cash and signed a three- year note for the balance.
d. Paid cash for equipment that cost $ 200,000.
e. Purchased supplies for $ 30,000 on account.
Required:
1. Analyze transactions (a)-(e) to determine their effects on the accounting equation, similar to Exhibit 2.5.
2. Record the transaction effects determined in requirement 1 using a journal entry format.
3. Summarize the journal entry effects from requirement 2 using T- accounts.
4. Prepare a trial balance at July 31.
5. Prepare a classified balance sheet at July 31.
6. As of July 31, has the financing for DSC's investment in assets primarily come from liabilities or stockholders' equity?