Answer:
1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts.
The truck purchased for personal use is not part of the corporation's assets, therefore it should not be included. The rest of the T accounts are:
<u>Cash</u> <u>Common stock</u>
Debit Credit Debit Credit
60000 300
9000
2500
<u> 12000 </u>
36500
<u>APIC - Common stock</u> <u>Land</u>
Debit Credit Debit Credit
94700 35000
<u>Equipment </u> <u>Notes payable</u>
Debit Credit Debit Credit
36000 27000
<u>12000 </u>
15000
<u>Notes receivable</u>
Debit Credit
2500
2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:
assets = liabilities + equity
cash $36,500
c.s. $500
a.p.i.c. $94,700
land $35,000
equip. $36,000
notes p. $15,000
<u>notes r. $2,500 </u>
assets = liabilities + equity
$110,000 = $15,000 + $95,000
3. Compute the market value per share of the stock.
Since the company doesn't have any revenues yet, we can only calculate the book value of the stocks = equity / total shares outstanding = $95,000 / 3,000 stocks = $31.67
