1. Evaluate the effect of each transaction by constructing a balance sheet showing an assets side and a liabilities + networth side.


(a) Samuel Specthrie establishes SS Manufacturing, paying $375,435 cash for the entire capital stock.

(b) Paid $68,000 cash for a building site.

(c) Erected building costing $179,000, paying $56,000 cash and issuing a $137,000 first mortgage for the balance

(d) Borrowed $70,000 cash from First National Bank.

(e) Bought furniture, costing $25,590 on an open account from Wood Furniture Co.

(f) Purchased $58,000 of tools from Universal Tool on credit.

(g) Bought $60,720 of computer equipment from Byte Co. for cash.

(h) Returned $15,000 of faulty tools to Universal Tool.

(i) Paid $35,000 in reduction of bank loan.

(j) Bought $60,450 of U.S. Treasury bonds for cash.


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