1. Swift Corp. completed the following transactions during Year 1.
At the beginning of Year 1, Swift Corp.’s accounting records had the following general ledger accounts and balances.
Swift Corp. completed the following transactions during Year 1.
Purchased land for $10,000 cash.
Acquired $5,000 cash from the issue of common stock.
Received $45,000 cash for providing services to customers.
Paid cash operating expenses of $32,500.
Borrowed $10,000 cash from the bank.
Paid a $2,500 cash dividend to the stockholders.
Determined that the market value of the land purchased in event 1 is $15,000.
Required
Record the transactions under an accounting equation. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table.
As of December 31, Year 1, determine the total amount of assets, liabilities, and stockholders’ equity and present this information in the form of an accounting equation.
What is the amount of total assets, liabilities, and stockholders’ equity as of January 1, Year 2?
SWIFT CORP.
Accounting Equation
Event
Assets =
Liabilities +
Stockholders’ Equity
Acct. Titles for RE
Cash
Land
Notes Payable
Common Stock
Retained
Earnings
Beg. Bal.
15,000
8,000
5,000
10,000
8,000
In this exercise, we will record the transactions under an accounting equation. After recording the transactions in the accounting equation, we will also compute the ending balances of total assets, liabilities, and stockholders’ equity.