Question

Bearings & Brakes Corporation (B&B) was incorporated as a private company. The company’s accounts included the following at June 30: Accounts Payable $ 58,000 Buildings 550,000 Cash 95,000 Common Stock 220,000 Equipment 158,000 Land 469,000 Notes Payable (long-term) 10,000 Retained Earnings 991,000 Supplies 7,000 During the month of July, the company had the following activities: a. Issued 3,400 shares of common stock for $340,000 cash. b. Borrowed $85,000 cash from a local bank, payable in four years. c. Bought a building for $176,000; paid $71,000 in cash and signed a three-year note for the balance. d. Paid cash for equipment that cost $95,000. e. Purchased supplies for $95,000 on account.

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Analyze transactions (a)–(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.) Record the transaction effects determined in part 1 using a journal entry format. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) . Summarize the journal entry effects from part 2 using T-accounts. Prepare a trial balance at July 31. Prepare a classified balance sheet at July 31.

Answer 1