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Required information [The following information applies to the questions displayed below.] Assume Down, Incorporated, was organized on May 1 to compete with Despair, Incorporated-a company that sells de- motivational posters and office products. Down, Incorporated, encountered the following events during its first month of operations. a. Received $48.000 cash from the investors who organized Down, Incorporated b. Borrowed $15,000 cash and signed a note due in two years. c. Ordered equipment costing $16,000. d. Purchased $6,000 in equipment, paying $4,000 in cash and signing a six-month note for the balance. e. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

Required information [The following information applies to the questions displayed below.] Assume Down, Incorporated, was organized on May 1 to compete with Despair, Incorporated-a company that sells de- motivational posters and office products. Down, Incorporated, encountered the following events during its first month of operations. a. Received $48.000 cash from the investors who organized Down, Incorporated b. Borrowed $15,000 cash and signed a note due in two years. c. Ordered equipment costing $16,000. d. Purchased $6,000 in equipment, paying $4,000 in cash and signing a six-month note for the balance. e. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

FINANCIAL ACCOUNTING
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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Required information [The following information applies to the questions displayed below.] Assume Down, Incorporated, was organized on May 1 to compete with Despair, Incorporated-a company that sells de- motivational posters and office products. Down, Incorporated, encountered the following events during its first month of operations. a. Received $48.000 cash from the investors who organized Down, Incorporated b. Borrowed $15,000 cash and signed a note due in two years. c. Ordered equipment costing $16,000. d. Purchased $6,000 in equipment, paying $4,000 in cash and signing a six-month note for the balance. e. Received the equipment ordered in (c), paid for half of it, and put the rest on account.
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Assume Down, Incorporated, was organized on May 1 to compete with Despair, Incorporated-a company that sells de- motivational posters and office products. Down, Incorporated, encountered the following events during its first month of operations. a. Received $48.000 cash from the investors who organized Down, Incorporated b. Borrowed $15,000 cash and signed a note due in two years. c. Ordered equipment costing $16,000. d. Purchased $6,000 in equipment, paying $4,000 in cash and signing a six-month note for the balance. e. Received the equipment ordered in (c), paid for half of it, and put the rest on account.
1. Summarize the financial effects of items (a)-(e) in a table. (Enter any decreases to account balances with a minus sign.) Beginning a b C d e Ending Cash Assets 0 48,000 15,000 (4,000) 59,000 Equipment 0= = = = = = Accounts Payable 0 Liabilities Short-term Notes Payable 0 Long-term Notes Payable 0 + + + + + + Stockholders' Equity Common Stock 0
Transcribed Image Text:1. Summarize the financial effects of items (a)-(e) in a table. (Enter any decreases to account balances with a minus sign.) Beginning a b C d e Ending Cash Assets 0 48,000 15,000 (4,000) 59,000 Equipment 0= = = = = = Accounts Payable 0 Liabilities Short-term Notes Payable 0 Long-term Notes Payable 0 + + + + + + Stockholders' Equity Common Stock 0
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