CP2-1 Determining Financial Statement Effects of Various Transactions [LO 2-2, LO 2-5]

Ag Bio Tech (ABT) was organized on January 1 by four friends. Each organizer invested $13,125 in the company and, in turn, was issued 10,500 shares of common stock. To date, they are the only stockholders. During the first month (January), the company had the following five events:

a.	Collected a total of $52,500 from the organizers and, in turn, issued the shares of stock.
b.	Purchased a building for $74,000, equipment for $19,750, and three acres of land for $18,600; paid $15,250 in cash and signed a note for the balance, which is due to be paid in 15 years.
c.	One stockholder reported to the company that 850 shares of his ABT stock had been sold and transferred to another stockholder for $8,500 cash.
d.	Purchased supplies for $6,650 cash.
e.	Sold one acre of land for $6,200 cash to another company.

Required:

2.

During the first month, the records of the company were inadequate. You were asked to prepare a summary of the preceding transactions. To develop a quick assessment of their economic effects on ABT, complete the spreadsheet that follows. (Enter any decreases to account balances with a minus sign.) Assets = Liabilities + Stockholders' Equity Cash Supplies Land Building Equipment Notes Payable Common Stock Retained Earnings Beg. 0 0 0 0 0 0 0 0 a. b. c. d. e. End.

4.	Based on the completed spreadsheet, compute the following amounts:

a. Total assets at the end of the month b. Total liabilities at the end of the month c. Total stockholders equity at the end of the month d. Cash balance at the end of the month e. Total current assets at the end of the month