The items making up the balance sheet of Smith Trucking at December 31 are listed below in tabular form similar to the illustration of the accounting equation in Chapter 2 of the text.

1. During a short period after December 31, Smith Trucking had the following transactions:
2. Bought office equipment at a cost of $2,600. Paid cash.
3. Collected $2,500 of accounts receivable.
4. Paid $2,000 of accounts payable.
5. Borrowed $5,000 from a bank. Signed a note payable for that amount.
6. Purchased three trucks for $60,000. Paid $5,000 cash and signed a note payable for the balance.
7. Sold additional stock to investors for $25,000.
Instructions
1. List the December 31 balances of assets, liabilities, and owners’ equity in tabular form as shown above.
2. Record the effects of each of the six transactions in the tabular arrangement illustrated above. Show the totals for all columns after each transaction.

Transcribed Image Text:

Owners' Equity Assets Liabilities Accounts Notes Accounts Cash + Receivable + Trucks + Equipment = Payable + Payable + Capital Stock Balances $4,700 $8,300 $72,000 $3,000 $10,000 $8,000 $70,000