Cost Analysis and Estimating for Engineering and Management

Cost Analysis and Estimating for Engineering and Management

Evaluate the effects of each transaction by constructing a balance sheet showing an assets side and a liabilities + net worth side.
Transaction
(a)
Eastwood Manufacturing is organized with a capital stock of $250,000 cash for the entire stock.
(b)
Bought from Culpepper Co. on credit $100,000 of manufacturing material.
(c)
Borrowed $80,000 cash from First National Bank.
(d)
Paid Culpepper $30,000 on account.
(e)
Returned $10,000 of defective material to Culpepper.
(f)
Loaned $50,000 to Robert Gondring.
(g)
Paid $20,000 cash for building site.
(h)
Erected a building at a cost of $120,000 cash.
(i)
Borrowed $70,000 from Friendly Insurance, giving a mortgage for collateral.
(Hints: Find the T-account balances for these titles: Cash, Accounts Receivable, Material, Land & Building, Accounts Payable, Notes Payable, Mortgage, and
Capital Stock. Each T-account will have a debit and credit column and determine the account balance. Then write the balance sheet.)

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