Ekar Company, formed by Catherine Ekar, has been operating for one year (2009). At the start of 2010, Ekar's T-account balances were as follows:
Assets:

Liabilities:

Owner's Equity:

Required:
1. Using the data from these T-accounts, determine the amounts for the following on January 1, 2010:
Assets $ --- = Liabilities $ ---- + Owner's Equity $ ---
2. Enter the following 2010 transactions in the T-accounts:
(a) Sold $1,500 of the investments for $1,500 cash.
(b) Sold one-fourth of the equipment for $1,000 in cash.
(c) Borrowed $2,600 from a local bank, signing a note due in three years (ignore interest).
(d) Paid $300 cash on a short-term note payable (ignore interest).
3. Compute ending balances in the T-accounts to determine amounts for the following on
December 31, 2010:
Assets $ --- = Liabilities $ ---- + Owner's Equity $ ---

Transcribed Image Text:

Cash Short-Term Investments Equipment 4,000 5,000 2,000 Short-Term Notes Payable Long-Term Notes Payable 300 600 C. Ekar, Capital 10,100