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

Answer 1

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