Create a Balance Sheet to record the following transactions for Taylor Company f
ID: 2406245 • Letter: C
Question
Create a Balance Sheet to record the following transactions for Taylor Company for the month of March.
a. Borrowed $4,500 from Local Bank and Trust
b. Investors contributed $10,000 in cash for shares of stock
c. Bought inventory costing $2,000 on credit
d. Sold inventory that originally cost $400 for $600 on credit
e. Purchased a new piece of equipment for $500 cash
f. Collected $600 in cash from sale of inventory in (d) above
g. Paid for inventory purchased in (c) above, which was originally purchased on credit
h. Paid $1,200 in cash for an insurance policy that covers the next year
i. Employees salary was $3,000 during the month of February, but have not yet been paid
j. Paid employees $2,900 for wages earned and recorded during February
Explanation / Answer
Accounting equation
Assets
Liabilities +
Shareholder's equity
Cash +
Accounts Receivables +
Equipment+
Inventory
Prepaid Insurance
Accounts Payable
Loan
Outstanding Salary
Common stock
Retained Earnings
a
$ 4,500.00
$ 4500
New Balance
$ 4,500.00
$ -
$ -
$ -
$ -
$ -
$ 4,500.00
$ -
$ -
$ -
b
$ 10,000.00
$ 10,000.00
New Balance
$ 14,500.00
$ -
$ -
$ -
$ -
$ -
$ 4,500.00
$ -
$ 10,000.00
$ -
c
$ 2,000.00
$ 2,000.00
New Balance
$ 14,500.00
$ -
$ -
$ 2,000.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ -
d
$ 600.00
$ (400.00)
$ 200.00
New Balance
$ 14,500.00
$ 600.00
$ -
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
e
$ (500.00)
$ 500.00
New Balance
$ 14,000.00
$ 600.00
$ 500.00
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
f
$ 600.00
$ (600.00)
New Balance
$ 14,600.00
$ -
$ 500.00
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
g
$ (2,000.00)
$ (2,000.00)
New Balance
$ 12,600.00
$ -
$ 500.00
$ 1,600.00
$ -
$ -
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
h
$ (1,200.00)
$ 1,200.00
New Balance
$ 11,400.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
i
$ 3,000.00
$ (3,000.00)
New Balance
$ 11,400.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ 3,000.00
$ 10,000.00
$ (2,800.00)
j
$ (2,900.00)
$ (2,900.00)
New Balance
$ 8,500.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ 100.00
$ 10,000.00
$ (2,800.00)
Taylor Company
Balance sheet
March
Assets
Cash
$ 8,500.00
Prepaid Insurance
$ 1,200.00
Inventory
$ 1,600.00
Equipment
$ 500.00
Total Assets
$ 11,800.00
Liabilities and shareholder's equity
Loan from bank
$ 4,500.00
Wages payable
$ 100.00
Common Stock
$ 10,000.00
Retained earnings
$ (2,800.00)
Total Liabilities and shareholder's equity
$ 11,800.00
Accounting equation
Assets
Liabilities +
Shareholder's equity
Cash +
Accounts Receivables +
Equipment+
Inventory
Prepaid Insurance
Accounts Payable
Loan
Outstanding Salary
Common stock
Retained Earnings
a
$ 4,500.00
$ 4500
New Balance
$ 4,500.00
$ -
$ -
$ -
$ -
$ -
$ 4,500.00
$ -
$ -
$ -
b
$ 10,000.00
$ 10,000.00
New Balance
$ 14,500.00
$ -
$ -
$ -
$ -
$ -
$ 4,500.00
$ -
$ 10,000.00
$ -
c
$ 2,000.00
$ 2,000.00
New Balance
$ 14,500.00
$ -
$ -
$ 2,000.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ -
d
$ 600.00
$ (400.00)
$ 200.00
New Balance
$ 14,500.00
$ 600.00
$ -
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
e
$ (500.00)
$ 500.00
New Balance
$ 14,000.00
$ 600.00
$ 500.00
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
f
$ 600.00
$ (600.00)
New Balance
$ 14,600.00
$ -
$ 500.00
$ 1,600.00
$ -
$ 2,000.00
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
g
$ (2,000.00)
$ (2,000.00)
New Balance
$ 12,600.00
$ -
$ 500.00
$ 1,600.00
$ -
$ -
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
h
$ (1,200.00)
$ 1,200.00
New Balance
$ 11,400.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ -
$ 10,000.00
$ 200.00
i
$ 3,000.00
$ (3,000.00)
New Balance
$ 11,400.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ 3,000.00
$ 10,000.00
$ (2,800.00)
j
$ (2,900.00)
$ (2,900.00)
New Balance
$ 8,500.00
$ -
$ 500.00
$ 1,600.00
$ 1,200.00
$ -
$ 4,500.00
$ 100.00
$ 10,000.00
$ (2,800.00)