Athletic Professional Training Company (APTC) was incorporated as a private company on June 1, 2017. The company’s accounts included the following at July 1, 2017: 

During the month of July, the company did the following: 

a. Issued 2,000 shares for $200,000 cash 

b. Borrowed $30,000 cash from a local bank, payable June 30, 2017 

c. Bought a building for $141,000; paid $41,000 in cash and signed a three-year note for the balance

d. Paid cash for equipment that cost $100,000 

e. Purchased supplies for $10,000 on account 

Required: 

1. Analyze transactions (a) through (e) to determine their effects on the accounting equation. Using a spreadsheet format with a column for each account, enter the July 1, 2017, amounts in the first line under the account headings, and calculate ending balances. 

2. Record the transaction effects determined in requirement 1 using journal entries. 

3. Summarize the journal entry effects from requirement 2 using T-accounts. 

4. Prepare a classified balance sheet at July 31, 2017. 

5. As of July 31, 2017, has the financing for APTC’s investment in assets come primarily from liabilities or shareholders’ equity?

Transcribed Image Text:

Accounts Payable $4,000 Land $100,000 Building 200,000 Notes Payable 17,000 Cash Retained Earnings Supplies 16,000 Contributed Capital 318,000 5,000 Equipment 18,000