Adam and David are two entrepreneurs who agreed to form a corporation ("A&D") to operate a carrepair shop in the Boston region. They began business on January 1, 2021 with the followingtransactions occurred during the month of January. Prepare journal entries, T-accounts, and abalance sheet as of January 31, 2021 for A&D. Organize your T-accounts by following the order ofassets, liabilities, equity, revenues, and expenses. Each T-account should start with a beginningbalance and end with an ending balance for each reporting period. (Note: for T-accounts, you may usea table like the one below. Create a table using the "Insert" or "Table" function in the ribbon. Cells can bemerged from the "Table" function in the ribbon. You can access more format functions when you click thethree dots on the right side above the text entry box.)Name of account 1Name of account 2Name of account 31. (a) Adam contributed $100,000 to A&D in exchange for 1,000 shares of A&D common stock. (b)David transferred to A&D title to a shop space, valued at $100,000, in exchange for 1,000 sharesof A&D common stock.2. A&D bought tools and supplies for $9,000 from X Corp., charging the purchase to its account.3. A&D ordered $2,000 in a used equipment from a supplier (Y Corp.). The terms of the orderpermitted A&D to cancel the order without any obligation whatsoever up until the time ofdelivery.4. A&D borrowed $8,000 from a local bank, a one-year loan with 10% annual interest rate. Theloan agreement specifies that interest and principle will be paid on the loan's maturity date.S. Y Corp. delivered the equipment A&D ordered. A&D paid Y Corp. for the equipment when it wasdelivered.6. A&D paid X Corp. $3,000 on its account.7. A&D realized that it ordered one repair tool too many from X Corp.. It sold the extra tool to alocal garage (Z LLC) for $800, which is what A&D paid for it. Z LLC gave A&D a note, payable byZ LLC to A&D in 30 days.

Name: Adam and David are two entrepreneurs who agreed to form a corporation
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Description: Adam and David are two entrepreneurs who agreed to form a corporation ("A&D") to operate a carrepair shop in the Boston region. They began business on January 1, 2021 with the followingtransactions occurred during the month of January. Prepare journ

Journal entry Date Accounts Debit Credit 1a Cash 100,000 Common Stock 100,000 (Adam…

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Adam and David are two entrepreneurs who agreed to form a corporation ("A&D") to operate a car repair shop in the Boston region. They began business on January 1, 2021 with the following transactions occurred during the month of January. Prepare journal entries, T-accounts, and a balance sheet as of January 31, 2021 for A&D. Organize your T-accounts by following the order of assets, liabilities, equity, revenues, and expenses. Each T-account should start with a beginning

Adam and David are two entrepreneurs who agreed to form a corporation ("A&D") to operate a car repair shop in the Boston region. They began business on January 1, 2021 with the following transactions occurred during the month of January. Prepare journal entries, T-accounts, and a balance sheet as of January 31, 2021 for A&D. Organize your T-accounts by following the order of assets, liabilities, equity, revenues, and expenses. Each T-account should start with a beginning

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Adam and David are two entrepreneurs who agreed to form a corporation ("A&D") to operate a car
repair shop in the Boston region. They began business on January 1, 2021 with the following
transactions occurred during the month of January. Prepare journal entries, T-accounts, and a
balance sheet as of January 31, 2021 for A&D. Organize your T-accounts by following the order of
assets, liabilities, equity, revenues, and expenses. Each T-account should start with a beginning
balance and end with an ending balance for each reporting period. (Note: for T-accounts, you may use
a table like the one below. Create a table using the "Insert" or "Table" function in the ribbon. Cells can be
merged from the "Table" function in the ribbon. You can access more format functions when you click the
three dots on the right side above the text entry box.)
Name of account 1
Name of account 2
Name of account 3
1. (a) Adam contributed $100,000 to A&D in exchange for 1,000 shares of A&D common stock. (b)
David transferred to A&D title to a shop space, valued at $100,000, in exchange for 1,000 shares
of A&D common stock.
2. A&D bought tools and supplies for $9,000 from X Corp., charging the purchase to its account.
3. A&D ordered $2,000 in a used equipment from a supplier (Y Corp.). The terms of the order
permitted A&D to cancel the order without any obligation whatsoever up until the time of
delivery.
4. A&D borrowed $8,000 from a local bank, a one-year loan with 10% annual interest rate. The
loan agreement specifies that interest and principle will be paid on the loan's maturity date.
S. Y Corp. delivered the equipment A&D ordered. A&D paid Y Corp. for the equipment when it was
delivered.
6. A&D paid X Corp. $3,000 on its account.
7. A&D realized that it ordered one repair tool too many from X Corp.. It sold the extra tool to a
local garage (Z LLC) for $800, which is what A&D paid for it. Z LLC gave A&D a note, payable by
Z LLC to A&D in 30 days.

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