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28 July, 12:46

The following transactions occurred for Lantana Company during its first month of operations and have been recorded in the T-accounts.

a. Received $50,000 cash from owners in exchange for common stock.

b. Purchased land for $20,000, paid $5,000 in cash and signed a 2-year note for the remainder.

c. Bought $900 of supplies on account.

d. Purchased $10,000 of equipment, paying cash.

e. Paid $500 on account for supplies purchased in transaction (c).

Required:

1. Determine the T-account balances.

2. Using the information in the transactions, prepare a classified balance sheet for Lantana Company.

(List long-term assets in alphabetical order)

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Answers (1)
  1. 28 July, 13:57
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    1. T-account balances.

    Common stock

    $50,000

    Land

    $20,000

    Cash

    $34,500

    Note Payable

    $15,000

    Supplies

    $900

    Trade Payable

    $400

    Equipment

    $10,000

    2. A classified balance sheet for Lantana Company

    Non - Current Assets

    Land $20,000

    Equipment $10,000

    Total Non - Current Assets $30,000

    Current Assets

    Supplies $900

    Cash $34,500

    Total Current Assets $35,400

    Total Assets $65,400

    Equity and Liabilities

    Equity

    Common stock $50,000

    Total Equity $50,000

    Current Liabilities

    Trade Payable $400

    Total Current Liabilities $400

    Non - Current Liabilities

    Note Payable $15,000

    Total Non - Current Liabilities $15,000

    Total Equity and Liabilities $65,400

    Explanation:

    T-account balances.

    Common stock

    $50,000

    Land

    $20,000

    Cash

    $50,000 - $5,000 - $10,000 - $500 = $34,500

    Note Payable

    $15,000

    Supplies

    $900

    Trade Payable

    $900 - $500 = $400

    Equipment

    $10,000
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