Question

Accurate Builders construction company was incorporated by John Davis. Assume the following activities occurred during the year: a. Received from three investors $70.000 cash and land valued at $45.000; each investor was issued 1.500 shares of common stock with a par value of $0.10 per share. b. Purchased construction equipment for use in the business at a cost of $44.000: one-fourth was paid in cash and the company signed a note for the balance (due in six months). c. Lent $2.500 to one of the investors, who signed a note due in six months. d. John Davis purchased a truck for personal use; paid $6.000 down and signed a one-year note for $27.000. e. Paid $17.000 on the note for the construction equipment in (b) (ignore interest). Required: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. 2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation: 4. Compute the market value per share of the stock. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. Cash Notes Receivable Beg. Bal 0 Beg. Bal. 0 End. Bal. End. Bal. Equipment Land Beg Bal. Beg. Bal. 0 End. Bal. End. Bal. Notes Payable Common Stock Beg. Bal. 0 Beg. Bal. 0 End. Bal. End. Bal. Additional Paid-in Capital IDA BI

Answer 1

Solution: Cash A/c

Particular	Amount	Particular	Amount
Beg. Balance		By Notes Payable A/c	2500
To Capital A/c	70000	By Drawings A/c	6,000
End. Balance	44500	By Notes Payable A/c	17,000

Equipment A/c

Particulars	Amount	Particulars	Amount
Beg. Bal.
To Cash A/c	11,000
To Notes Payable A/c	33,000	End Bal	44,000

Notes Payable A/c

Particulars	Amount	Particulars	Amount
		Beg Balance
		By Equipment A/c	33,000
End Balance	33,000

Land A/c

Particulars	Amount	Particulars	Amount
Beg. Balance
To capital A/c	45,000	End Balance

Common Stock A/c

Particulars	Amount	Particulars	Amount
		Beg. Balance
		By cash A/c	70,000
End Balance	1,15,000	By Land A/c	45,000

Drawings A/c

Particualrs	Amount	Particulars
Beg. balance
To cash A/c	6,000	End Balance