1. Analyze each item for its effects on the accounting equation of Laser Delivery Services for the year ended December 31. (Enter any decreases to account balances with a minus sign.) TIP: Transaction (a) is presented below as an example. TIP: The new motor in transaction (d) is treated as an increase to the cost of the truck.

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 1BD
icon
Related questions
icon
Concept explainers
Question
Required information
[The following information applies to the questions displayed below.]
Laser Delivery Services, Incorporated (LDS), was incorporated January 1. The following transactions occurred during the
year:
a. Received $40,000 cash from the company's founders in exchange for common stock.
b. Purchased land for $12,000, signing a two-year note (ignore interest).
c. Bought two used delivery trucks at the start of the year at a cost of $10,000 each; paid $2,000 cash and signed a note
due in three years for $18,000 (ignore interest).
d. Paid $2,000 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks.
e. Stockholder Jonah Lee paid $300,000 cash for a house for his personal use.
Required:
1. Analyze each item for its effects on the accounting equation of Laser Delivery Services for the year ended December 31. (Enter any
decreases to account balances with a minus sign.)
TIP: Transaction (a) is presented below as an example.
TIP: The new motor in transaction (d) is treated as an increase to the cost of the truck.
Beginning Balance
a.
b.
C.
d.
e.
Ending Balance
Cash
0
40,000
(2,000)
(2,000)
36,000
Assets
Equipment
0
20,000
20,000
Land
0 =
12,000 =
=
=
12,000 =
Liabilities
Accounts
Payable
0
Notes Payable
(long-term)
+
+
0 +
+
2+
18,000 +
1+
+
18,003 +
Stockholders' Equity
Common Stock
0
40,000
300,000
340,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Laser Delivery Services, Incorporated (LDS), was incorporated January 1. The following transactions occurred during the year: a. Received $40,000 cash from the company's founders in exchange for common stock. b. Purchased land for $12,000, signing a two-year note (ignore interest). c. Bought two used delivery trucks at the start of the year at a cost of $10,000 each; paid $2,000 cash and signed a note due in three years for $18,000 (ignore interest). d. Paid $2,000 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks. e. Stockholder Jonah Lee paid $300,000 cash for a house for his personal use. Required: 1. Analyze each item for its effects on the accounting equation of Laser Delivery Services for the year ended December 31. (Enter any decreases to account balances with a minus sign.) TIP: Transaction (a) is presented below as an example. TIP: The new motor in transaction (d) is treated as an increase to the cost of the truck. Beginning Balance a. b. C. d. e. Ending Balance Cash 0 40,000 (2,000) (2,000) 36,000 Assets Equipment 0 20,000 20,000 Land 0 = 12,000 = = = 12,000 = Liabilities Accounts Payable 0 Notes Payable (long-term) + + 0 + + 2+ 18,000 + 1+ + 18,003 + Stockholders' Equity Common Stock 0 40,000 300,000 340,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,