Question

Glenn Grimes is the founder and president of Heartland Construction, a real estate development venture. The business transactions during February while the company was being organized are listed as follows. Feb. 1 Grimes and several others invested $500,000 cash in the business in exchange for 30,000 shares of capital stock. Feb. 10 The company purchased office facilities for $270,000, of which $90,000 was applicable to the land and $180,000 to the building. A cash payment of $54,000 was made and a note payable was issued for the balance of the purchase price. Feb. 16 Computer equipment was purchased from PCWorld for $13,700 cash. Feb. 18 office furnishings were purchased from Hi-Way Furnishings at a cost of $9,750. A $975 cash payment was made at the time of purchase, and an agreement was made to pay the remaining balance in two equal installments due March 1 and April 1. Hi-Way Furnishings did not require that Heartland sign a promissory note. Feb. 22 Office supplies were purchased from Office World for $345 cash. Feb. 23 Heartland discovered that it paid too much for a computer printer purchased on February 16. The unit should have cost only $360, but Heartland was charged $395. PCWorld promised to refund the difference within seven days. Feb. 27 Malled Hi-Way Furnishings the first installment due on the account payable for office furnishings purchased on February 18. Feb. 28 Received $35 from PCWorld in full settlement of the account receivable created on February 23. Required: a. Prepare journal entries to record the above transactions. Select the appropriate account titles from the following chart of accounts. Cash Accounts Receivable Office Supplies Office Furnishings Computer Systems Land Office Building Notes Payable Accounts Payable Capital Stock b. Indicate the effects of each transaction on the company's assets, liabilities, and owners' equity for the month of February. The Feb. 1 transaction is provided for you.

Answer 1

particolare Debit $ Date Credit & Feb-1 Lapsimon 500000 Capital Stoch alc br 500000 To cash ac Feb-lo Dr Land alc 90000 180000 Dr offe Building all 54000 alc 216000 To cash To Notes payable Feb- 16 Dr 13700 Computer system ale 13700 To Accounts payable Feb 9750 office turnishings ale mr 12 975 To cash ale 8775 To Accounts payable br 345 alc Feb 22 office supplies 345 to cash ale

Feb Account receveeble ale br 23 to sttice Tumishing 35 e Feb 27 'No entry reacred eb br 35 28 Cash ale 35 To Account recrevable ake re

b Elaced on Date Amount Account Asset Lrabling Owners Capital Febil A 00000 Capital stock. 500000 Cash ale -500000 270000 Febio 270000 Land & Building 54000 Cash 216000 Account perjah 5400 o 216ooo 13700 Feb- 16 13700 computer 13700 Accounts pagal Febi 18 9750 office Furnion 9750 cash |- 975 975 8775 8775 Accounts payah Feb 345 office suppler cash 345 -345 Accout recovery 35 Feb 23 35 Apice Am 35 reb 27 Teb 28 Cash ale 85 Accon rewah 185 Total trust in call 261525 Negative 238475 Positive 500000 positive