Chapter 2, Problem 12ME

Reporting a Classified Balance Sheet

Given the transactions in M2-9 (including the sample), prepare a classified balance sheet for Spot- lighter, Inc., as of January 31.

M1-9 Determining Financial Statement Effects of Several Transactions

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided.

1. a. (Sample) Borrowed $3,940 from a local bank on a note due in six months.
2. b. Received $4,630 cash from investors and issued common stock to them.
3. c. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year.
4. d. Paid $300 cash for supplies.
5. e. Bought and received $700 of supplies on account.