The Following Transactions Apply to Jack's Computer Service for the Year

question 135

Essay

The following transactions apply to Jack's Computer Service for the year 2013.
1) Issued stock to investors for $15,000 cash.
2) Purchased land for $12,000 cash.
3) Performed services on account for $17,000.
4) Collected $11,200 on accounts receivable.
5) Paid operating expenses of $6,500.
Required:
a) Draw T-accounts and post the above transactions to the appropriate T-accounts.
b) Prepare a balance sheet for Jack's Computer Service for December 31, 2013.

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Definitions:

Market Value Method

An accounting method that values assets or securities at their current market prices rather than at historical costs or book values.

Book Value Method

An accounting technique where assets are valued in the balance sheet at their original cost minus any accumulated depreciation.

Stockholder's Equity

The residual interest in the assets of the corporation after deducting liabilities, representing the ownership interest of shareholders.

Non-interest-bearing Note

A financial instrument or loan that does not accrue interest over its life, meaning the borrower repays only the principal amount.