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Accounting Event Analysis and the Balance Sheet. Presented below are the balance sheet accounts of the Mayfair Company as of December 1. The accounts are listed in random order.
Machinery & equipment (net)$22,500Cash$15,000Accounts payable15,000Notes payable14,250Note receivable3,000Accounts receivable22,500Inventory4,500Long-term investments12,000Bank loan15,750Additional paid-in capital114,000Building (net)45,000Land60,000Common stock ($1 par value)7,500Retained earnings18,000
During the month of December, the following events occurred:
Purchased inventory on credit that cost $4,500. Issued common stock at par value in exchange for machinery and equipment valued at $18,000. The building was appraised at a value of $67,500 by a certified real estate appraiser. The note receivable of $3,000 was collected. $12,000 cash was paid on the outstanding accounts payable. Purchased land valued at $37,500, paying $4,500 in cash and signing a five-year note for the remaining amount. Required
Prepare the balance sheet as of December 1, for the Mayfair Company.
Mayfair Company Balance Sheet December 1AssetsLiabilities and Shareholders EquityCurrent assetsLiabilities
AnswerAccounts payableAdditional paid in capitalCashCommon stockLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentRetained earnings
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts receivableAdditional paid in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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Notes receivable
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Bank loan
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AnswerAccounts payableAdditional paid in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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Total Liabilities
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Total current assets
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Noncurrent assetsShareholder's equity
AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockInventoryMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableCashCommon stockInventoryLong-term investmentsMachinery& equipmentNotes payable
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Building
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCashInventoryLong-term investmentsMachinery& equipmentNotes payable
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Land
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AnswerAccounts payableAccounts receivableCashInventoryLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockInventoryLong-term investmentsNotes payableRetained earnings
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Total shareholders' equity
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Total noncurrent assets
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Total assets
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Total liabilities and equity
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Prepare a spreadsheet using the balance sheet equation as illustrated in this chapter for the December events.
Use negative signs with answers to show a reduction in an account balance.
Mayfair Company Transaction Summary
12/1 1 2 3 4 5 6 12/31 Cash
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Accounts receivable
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Notes receivable
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Inventory
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Machinery & equipment
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Building
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Land
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Long-term investments
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Total assets Answer
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Accounts payable
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Notes payable
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Bank loan
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Total liabilities Answer
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Common stock
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Additional paid in capital
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Retained earnings
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Total equity Answer
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Prepare the balance sheet as of December 31, for the Mayfair Company.
Mayfair Company Balance Sheet December 31AssetsLiabilities and Shareholders EquityCurrent assetsLiabilities
AnswerAccounts payableAdditional paid in capitalCashCommon stockLong-term investmentsMachinery and equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableAdditional piad in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentRetained earnings
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts receivableAdditional paid in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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Notes receivable
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Bank loan
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AnswerAccounts payableAdditional paid in capitalCommon stockInventoryLong-term investmentsMachinery& equipmentNotes payableRetained earnings
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Total liabilities
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Total current assets
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Noncurrent assets:Shareholder's equity:
AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockInventoryMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableCashCommon stockInventoryLong-term investmentMachinery& equipmentNotes payable
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Building
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCashInventoryLong-term investmentsMachinery& equipmentNotes payable
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Land
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AnswerAccounts payableAccounts receivableCashInventoryLong-term investmentMachinery& equipmentNotes payableRetained earnings
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AnswerAccounts payableAccounts receivableAdditional paid in capitalCommon stockInventoryLong-term investmentsNotes payableRetained earnings
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Total shareholders' equity
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Total noncurrent assets
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Total assets
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Total liabilities and equity
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Answer & Explanation
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