Question

The following are the transactions of Spotlighter, Inc., for the month of January a. Borrowed $3,940 from a local bank on a note due in six months. b. Received $4,630 cash from investors and issued common stock to them. c. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year. d. Paid $300 cash for supplies. e. Bought and received $700 of supplies on account. Prepare a classified balance sheet for Spotlighter Inc., as of January 31.

Answer 1

BALANCE SHEETS 31 Jan

Cash $8,070

Supplies $1,000

TOTAL CURRENT ASSETS $9,070

Property and Equipment $1,000

TOTAL NONCURRENT ASSETS 1,000

TOTAL ASSETS $10,070

Notes Payable $4,740

Accounts Payable $0,700

TOTAL CURRENT LIABILITIES $5,440

TOTAL NONCURRENT LIABILITIES $0,000

TOTAL LIABILITIES $5,440

Common Stock $4,630

TOTAL EQUITY $4,630

TOTAL EQUITY & LIABILITIES $10,070

Step-by-step explanation:

a. Borrowed $3,940 from a local bank on a note due in six months

Debit $3,940 Cash

Credit $3,940 Notes Payable

b. Received $4,630 cash from investors and issued common stock to them

Debit $4,630 Cash

Credit $4,630 Common Stock

c. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year.

Debit $1,000 Equipment

Credit $0,200 Cash

Credit $0,800 Note Payable

d. Paid $300 cash for supplies

Debit $0,300 Supplies

Credit $0,300 Cash

e. Bought and received $700 of supplies on account

Debit $0,700 Supplies

Credit $0,700 Accounts Payable

Answer 2

Cash 8,070

Supplies 1,000

Current Assets 9,070

Equipment 1,000

Non-current Assets 1,000

Total Assets 10,070

Account Payable 1,500

Note Payable 3,940

Total Liabilities 5,440

Common Stock 4,630

Total Equity 4,630

Total Liaiblities + Owner's Equity 10,070

Auxiliar T-account

Cash

Debit Credit

3,940

4,630 200

300

8,070

Supplies

Debit Credit

300

700

1,000

Account Payable

Debit Credit

800

700

1,500