Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $5,000 in the company and, in turn, was issued 4,000 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the following five events: a. Collected a total of $20,000 from the organizers and, in turn, issued common stock. b. Purchased a building for $86,500, equipment for $28,750, and three acres of land for $24,600; paid $10,500 in cash and signed a note for the balance, which is due to be paid in 15 years. c. One stockholder reported to the company that 200 shares of his ABT stock had been sold and transferred to another stockholder for $2,000 cash. d. Purchased supplies for $5,750 cash. e. Sold one acre of land for $8,200 cash to another company. Required: 2. During the first month, the records of the company were inadequate. You were asked to prepare a summary of the preceding transactions. To develop a quick assessment of their economic effects on ABT, complete the spreadsheet that follows. Transaction (a) is shown as an example. 4. Based on the completed spreadsheet, compute total assets, total liabilities, total stockholders' equity, Cash balance, and total current assets at the end of the month. 5. As of January 31, has the financing for ABT's investment in assets primarily come from liabilities or stockholders' equity?
Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $5,000 in the company and, in turn, was issued 4,000 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the following five events: a. Collected a total of $20,000 from the organizers and, in turn, issued common stock. b. Purchased a building for $86,500, equipment for $28,750, and three acres of land for $24,600; paid $10,500 in cash and signed a note for the balance, which is due to be paid in 15 years. c. One stockholder reported to the company that 200 shares of his ABT stock had been sold and transferred to another stockholder for $2,000 cash. d. Purchased supplies for $5,750 cash. e. Sold one acre of land for $8,200 cash to another company. Required: 2. During the first month, the records of the company were inadequate. You were asked to prepare a summary of the preceding transactions. To develop a quick assessment of their economic effects on ABT, complete the spreadsheet that follows. Transaction (a) is shown as an example. 4. Based on the completed spreadsheet, compute total assets, total liabilities, total stockholders' equity, Cash balance, and total current assets at the end of the month. 5. As of January 31, has the financing for ABT's investment in assets primarily come from liabilities or stockholders' equity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A-7
Transcribed Image Text:Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $5,000 in the company and, in turn, was issued
4,000 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the
following five events:
a. Collected a total of $20,000 from the organizers and, in turn, issued common stock.
b. Purchased a building for $86,500, equipment for $28,750, and three acres of land for $24,600; paid $10,500 in cash and signed a
note for the balance, which is due to be paid in 15 years.
c. One stockholder reported to the company that 200 shares of his ABT stock had been sold and transferred to another stockholder
for $2,000 cash.
d. Purchased supplies for $5,750 cash.
e. Sold one acre of land for $8,200 cash to another company.
Required:
2. During the first month, the records of the company were inadequate. You were asked to prepare a summary of the preceding
transactions. To develop a quick assessment of their economic effects on ABT, complete the spreadsheet that follows. Transaction
(a) is shown as an example.
4. Based on the completed spreadsheet, compute total assets, total liabilities, total stockholders' equity, Cash balance, and total
current assets at the end of the month.
5. As of January 31, has the financing for ABT's investment in assets primarily come from liabilities or stockholders' equity?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: Introduction and solution planning.
VIEWStep 2: (2) Preparation of spreadsheet for transactions during the first month.
VIEWStep 3: Preparation of formula or calculation table.
VIEWStep 4: (4) Calculation of total assets, Total liabilities, stockholders' equity, cash and current assets.
VIEWSolution
VIEW
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 3 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education