Presented below are the balances, listed in alphabetical order of Green Company at October 1, 2008:
|Long-term Debt Payable||20700|
Below are the transactions for Green Company for the month of October 2008:
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Question & Answer: Presented below are the balances, listed in alphabetical order of Green Company at October 1, 2008:…..
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a. Sold inventory to a friend at cost, which was $800. The friend paid in cash.
b. Borrowed an additional $1300 in notes payable.
c. Collected $1900 from credit customers.
d. Paid $2600 of the amount owed on account.
Prepare a balance sheet as of October 31, 2008, considering the beginning balances and incorporating the effects of the October 2008 transactions.
|a) Sold inventory to a friend at cost, which was $800. The friend paid in cash.|
|This will increase cash by $800 and reduce inventory by $800|
|b. Borrowed an additional $1300 in notes payable.|
|This will increase notes payable by $1300 and increase cash by $1300|
|c. Collected $1900 from credit customers.|
|This will reduce accounts receivable and increase cash|
|d. Paid $2600 of the amount owed on account.|
|This will reduce accounts payable and also will reduce cash|
|Balance sheet given below after effecting the changes mentioned above:|
|As of October 31,2008|
|D=A+B+C||Total Current assets||$22,200|
|G=E+F||Total Fixed assets||$46,900|
|K=I+J||Total current liabilities||$9,000|
|Long Term Liabilities|
|L||Long term debt payable||$20,700|
|Share holder equity:|
|N||Paid in capital||$39,400|
|P=M+N||Total liabilities and shareholders equity||$69,100|