The following transactions took place during the first year of business for ABC Company. (Dollars...
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Accounting
The following transactions took place during the first year of business for ABC Company. (Dollars given are in millions, use the numbers as shown, but make a note on your statements that the dollars are in millions). The firms year end isJune 30.
Issued ABC stock (received contribution from owners) in the amount of $250
Borrowed $850 from a local bank with a 6-year note (ignore interest expense)
Purchased land for $650 cash
Paid $25 for operating expenses
Purchased new equipment for cash of $300
Collected $800 from customers for services provided
Paid salaries to employees of $480
Purchased supplied for $20 on account, to be used in the coming year
Paid dividends to new shareholders of $5
Question:
Set up an accounting equation worksheet and record each transaction on the worksheet. (Record the equipment purchase as an asset and ignore the fact that the equipment was probably used during the year. Also, ignore the interest expense on the bank note).
Prepare the four basic financial statements from the worksheet.
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