Question

Swish Watch Corporation manufactures, sells, and services expensive watches. The company has been in business for three years. At the end of the previous year, the accounting records reported total assets of $2,345,000 and total liabilities of $1,870,000. During the current year, the following s occurred events a. Issued additional shares of common stock for $199,000 cash. b. Borrowed $231,000 cash from the bank and signed a 10-year note. c. A stockholder sold $6,000 of his stock in Swish Watch Corporation to another investor d. Built an addition on the factory buildings for $290,000 and paid cash to the contractor e. Purchased equipment for the new addition for $53,000, paying $16,500 in cash and signing a six-month note for the balance. f. Returned a $4,900 piece of equipment, from (e), because it proved to be defective; received a cash refund Required: 1. Complete the spreadsheet that follows, using plus (+) for increases and minus () for decreases for each account. The first transaction is used as an example. (Enter any decreases to account balances with a minus sign.)

Answer 1

I can explain how to approach this problem.

To complete the spreadsheet, you need to track the changes in various accounts based on the given transactions. Here's how you can record these transactions:

1. Common Stock:
- Transaction (a): +$199,000 (Issued additional shares of common stock for cash)
- Transaction (c): No change (Stockholder selling to another investor doesn't affect common stock)

2. Notes Payable (Long-Term Debt):
- Transaction (b): +$231,000 (Borrowed cash from the bank and signed a 10-year note)

3. Factory Buildings:
- Transaction (d): +$290,000 (Built an addition on the factory buildings and paid cash)

4. Equipment:
- Transaction (e): +$36,500 (Purchased equipment for the new addition for cash and note)
- Transaction (f): -$4,900 (Returned defective equipment)

Now, you can update the spreadsheet using these changes for each account. Keep in mind that I can't actually create or display a spreadsheet in this text-based format, but you can organize it in a similar format in a spreadsheet software like Excel.