Tommy began a business, and after collecting $5,600 from an equity investor and
ID: 2329289 • Letter: T
Question
Tommy began a business, and after collecting $5,600 from an equity investor and borrowing $4,700 from a bank, he purchased a piece of land for $7,400. During the year, he leased the land to Sheila and received $3,200 in cash. He paid $2,200 cash for expenses during the year and paid an $1,300 dividend to the equity investor. Prepare a balance sheet. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Tommy's Business Balance Sheet As of Assets Liabilities& Shareholders'EquityExplanation / Answer
Answers
Tommy's Business
Balance Sheet
Assets
Working
Cash
$ 2,600.00
[5600 + 4700 - 7400 + 3200 - 2200 - 1300
Land
$ 7,400.00
[Land purchase of $ 7400]
Total Assets
$ 10,000.00
Liabilities & Shareholder's Equity
Working
Loan from bank
$ 4,700.00
[Amount borrowed]
Common Stock
$ 5,600.00
[Cash invested]
Retained Earnings
$ (300.00)
[3200 - 2200 - 1300]
Total Liabilities & Shareholder's Equity
$ 10,000.00
Tommy's Business
Balance Sheet
Assets
Working
Cash
$ 2,600.00
[5600 + 4700 - 7400 + 3200 - 2200 - 1300
Land
$ 7,400.00
[Land purchase of $ 7400]
Total Assets
$ 10,000.00
Liabilities & Shareholder's Equity
Working
Loan from bank
$ 4,700.00
[Amount borrowed]
Common Stock
$ 5,600.00
[Cash invested]
Retained Earnings
$ (300.00)
[3200 - 2200 - 1300]
Total Liabilities & Shareholder's Equity
$ 10,000.00