Company Background:
Smiths Incorporated makes model cars to sell to toy stores & has a repair dept to repair clients cars for a fee & in business for 5 yrs. At the end of 2005, the accting records reflect total assets of $500,000 and total liabilities of $200,000. During the current year, 2006 the following events took place.
a) issued additional shares of stock for $100,000 cash
b) borrowed $120,000 cash from bank & signed 10year note
c) built addition on the factory for $200,000 & paid cash to contractor
d) purchased new equipment for the new addition for $30,000, paying $3000 in cash & signed a note due in 6 months for balance
e) returned $3000 piece of equipment, from d, and received a reduction of the note payable
f) purchased a delivery truck (equipment) for $10,000, paid $5000 cash & signed a 9 month note for remainder
h) stockholder sold $5000 of his capital stock in Smith's to his neighbor
Questions:
1) Can you help me place above items in basic accounting spreadsheet?
Assets = Liabilities + Stockholder
Cash / notes / equipment / bldg = notes / contributed + retained earnings
receivable payable capt
(Cash shows starting balance at $100,000 and Contributed capital at $100,000)
2) Do I include the event listed in h on the spreadsheet or do I leave the event off the spreadsheet?
3) Based on beginning balances plus the completed spreadsheet, what would be the following amounts?
*Total assets a the end of the year?
*Total liabilities at the end of the year?
*Total stockholders equity at the end of the year?
4) As of Dec 31, 2006 fas the financing for Smiths investment in assets primarly come from liabilities or stockholder equity?