Selected Transactions for Stockton Corporation During Its First Month in Business

question 167

Essay

Selected transactions for Stockton Corporation during its first month in business are presented below:
Sept. 1 Issued common stock in exchange for $30,000 cash received from investors.
5 Purchased equipment for $20,000, paying $2,000 in cash and the balance on account.
25 Paid $6,000 cash on balance owed for equipment.
30 Paid $1,000 cash dividend.
Stockton's chart of accounts shows: Cash, Equipment, Accounts Payable, Common Stock, and Dividends.
Instructions
(a) Prepare a tabular analysis of the September transactions. The column headings should be: Cash + Equipment = Accounts Payable + Stockholders' Equity. For transactions affecting stockholders' equity, provide explanations in the right margin.
(b) Journalize the transactions. Do not provide explanations.
(c) Post the transactions to T-accounts.

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Definitions:

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