grady service company inc was organized by chris grady and 242842

Grady Service Company, Inc., was organized by Chris Grady and five other investors. The following activities occurred during the year:

a. Received $63,000 cash from the investors; each was issued 1,400 shares of capital stock.

b. Signed an agreement with a cleaning service to pay it $120 per week for cleaning the corporate offices.

c. Received an additional contribution from investors who provided $4,000 in cash and land valued at $13,000 in exchange for stock in the company.

d. Purchased equipment for use in the business at a cost of $16,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).

e. Lent $2,200 to one of the investors who signed a note due in six months.

f. Chris Grady borrowed $10,000 for personal use from a local bank, signing a one-year note.

Required:

1. Create T-accounts for the following accounts: Cash, Note Receivable, Equipment, Land, Note Payable, and Contributed Capital. Beginning balances are zero. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. Include good referencing and totals for each T-account.

2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:

Assets $ _______ = Liabilities $ _______+ Stockholders’ Equity $ _______

3. Explain your response to events (b) and (f).

Related Articles

armstrong helmet company 239138

Armstrong Helmet Company manufactures a unique model of bicycle helmet Question Case project Learning Objectives: Prepare practical applications of course concepts Develop analytical and critical thinking Develop decision-making capabilities Enhance professional...

read more
GET A FREE QUOTE





  
Open chat
Need help? We are Online 24/7
Hello 👋
Can we help you?