Bailey Delivery Company, Inc., was organized in 2018 in Wisconsin. The following transactions occurred during the year: Received cash from investors in exchange for 14,000 shares of stock (par value of $1.00 per share) with a market value of $6 per share. Purchased land in Wisconsin for $24,000, signing a one-year note (ignore interest). Bought two used delivery trucks for operating purposes at the start of the year at a cost of $14,000 each; paid $6,000 cash and signed a note due in three years for the rest (ignore interest). Paid $2,300 cash to a truck repair shop for a new motor for one of the trucks. (Increase the account you used to record the purchase of the trucks because the productive life of the truck has been improved) Sold one-fourth of the land for $6,000 to Pablo Development Corporation, which signed a six-month note. Stockholder Helen Bailey paid $29,000 cash for a vacant lot (land) in Canada for her personal use. E2-16 Part 1 Required: 1. Using the T-accounts, record the effects of transactions (a) through (f) by Bailey Delivery Company.

Respuesta :

The effects of transactions (a) through (f) are recorded in the following T-accounts in the books of Bailey Delivery Company, Inc.

Cash

Account Titles                       Debit    Credit

Common stock                  $12,000

Additional Paid-in Capital $70,000

Delivery Trucks                               $6,000

Delivery Trucks                               $2,300

Notes Receivable

Account Titles                       Debit    Credit

Land                                    $6,000

Delivery Trucks

Account Titles                       Debit    Credit

Cash                                      $6,000

Long-term Notes Payable $22,000

Cash                                                  $2,300

Land

Account Titles                       Debit    Credit

Short-term Notes Payable   $24,000

Notes Receivable                             $6,000

Short-term Notes Payable

Account Titles                       Debit    Credit

Land                                                  $24,000

Long-term Notes Payable

Account Titles                       Debit    Credit

Delivery Trucks                               $22,000

Common Stock

Account Titles                       Debit    Credit

Cash                                                 $14,000

Additional Paid-in Capital

Account Titles                       Debit    Credit

Cash                                                 $70,000

Data Analysis:

a. Cash $84,000 Common Stock $14,000 Additional Paid-in Capital $70,000

b. Land $24,000 Short-term Notes Payable $24,000

c. Delivery Trucks $28,000 Cash $6,000 Long-term Notes Payable $22,000

d. Delivery Trucks $2,300 Cash $2,300

e. Notes Receivable $6,000 Land $6,000

f. No effect

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