Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $6,250 in the company and, in turn, was issued 5,000 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the following five events: Collected a total of $25,000 from the organizers and, in turn, issued common stock.Purchased a building for $79,750, equipment for $33,500, and three acres of land for $37,500; paid $11,000 in cash and signed a note for the balance, which is due to be paid in 15 years.One stockholder reported to the company that 300 shares of his ABT stock had been sold and transferred to another stockholder for $3,000 cash.Purchased supplies for $5,000 cash.Sold one acre of land for $12,500 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.4. Based on the completed spreadsheet, compute the following amounts:5. As of January 31, has the financing for ABT’s investment in assets primarily come from liabilities or stockholders’ equity? Complete this question by entering your answers in the tabs below.Required 2Required 4Required 5During the first month, the records of the company were inadequate. You were asked to prepare a summary of the preceding transactions. Todevelop a quick assessment of their economic effects on ABT, complete the spreadsheet that follows. (Enter any decreases to accountbalances with a minus sign.)Stockholders' EquityAssetsLiabilitiesRetainedNotesCommonCashSuppliesLandBuilding EquipmentPayableStockEarningsBegд.a.b.C.d.e.End. Based on the completed spreadsheet, compute the following amounts:Total assets at the end of the montha.b. Total liabilities at the end of the monthTotal stockholders' equity at the end of the monthd. Cash balance at the end of the monthTotal current assets at the end of the monthC.e.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $6,250 in the company and, in turn, was issued 5,000 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the following five events:

Collected a total of $25,000 from the organizers and, in turn, issued common stock.
Purchased a building for $79,750, equipment for $33,500, and three acres of land for $37,500; paid $11,000 in cash and signed a note for the balance, which is due to be paid in 15 years.
One stockholder reported to the company that 300 shares of his ABT stock had been sold and transferred to another stockholder for $3,000 cash.
Purchased supplies for $5,000 cash.
Sold one acre of land for $12,500 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.
4. Based on the completed spreadsheet, compute the following amounts:
5. As of January 31, has the financing for ABT’s investment in assets primarily come from liabilities or stockholders’ equity?

Based on the completed spreadsheet, compute the following amounts:
Total assets at the end of the month
a.
b. Total liabilities at the end of the month
Total stockholders' equity at the end of the month
d. Cash balance at the end of the month
Total current assets at the end of the month
C.
e.

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