Condition : John Smith started an incorporated CD and tape store called Music Mart, Inc.

on 1st Janu
by depositing $25000 of his own funds in a bank account that he has opened in the name of the bu
$25000 of stock certificates in return. He is the sole owner of the corporation.
Transaction as on : 1st Jan 2010
Amount
$
Contributed / Share Capital $ 25,000.00

Liabilities and Equities

Total $ 25,000.00

Condition : Music Mart borrowed $12500 from a bank; the loan was evidenced by a legal document
Transaction as on : 2nd Jan 2010
Liabilities and Equities
Amount
$
Contributed / Share Capital $ 25,000.00
Note Payables ( Loan ) $ 12,500.00
Total $ 37,500.00

Condition : The business purchased inventory (merchandise it intended to sell) in the amount of $5
Transaction as on : 3rd Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity $ 25,000.00
Note Payables ( Loan ) $ 12,500.00
Total $ 37,500.00

Condition : The store sold merchandise costing $500, for $750 in cash.
Transaction as on : 4th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity ( 25000 + Profit : 250 ) $ 25,250.00
Note Payables ( Loan ) $ 12,500.00
Total $ 37,750.00

Condition : The store purchased and received merchandise for inventory for $5,000, agreeing to pa

Liabilities and Equities

Transaction as on : 5th Jan 2010

Amount
$
Owner's Equity $ 25,250.00
Note Payables ( Loan ) $

12,500.00

Accounts Payable
$
( Earlier terminology : Crediter )

5,000.00

Total $ 42,750.00

Condition : Merchandise costing $1,500 was sold for $2,300, which was received in cash.
Transaction as on : 6th Jan 2010
Amount
$
Owner's Equity ( 25250 + Profit : 800 ) $ 26,050.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00

Liabilities and Equities

Total $ 43,550.00

Condition : Merchandise costing $1,700 was sold for $2,620, the customers agreeing to pay $2,620
Transaction as on : 7th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity ( 26050 + 920 ) $ 26,970.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Total $ 44,470.00

Condition : The store purchased a three year fire insurance policy for $1,224, paying cash.
Transaction as on : 8th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity $ 26,970.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00

Total $ 44,470.00

Condition : The store purchased two lots of land of equal size for a total of $24,000. It paid $6,000
year mortgage for $18,000.
Transaction as on : 9th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity $ 26,970.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Mortgage on land $ 18,000.00

Total $ 62,470.00

Condition : The store sold one of the two lots of land for $12,000. It received $3,000 cash, and in ad
assumed $9,000 of the mortgage; that is, Music Mart, Inc., became no longer responsible for this h
Liabilities and Equities

Transaction as on : 10th Jan 2010

Amount
$
Owner's Equity $

26,970.00

Note Payables ( Loan ) $

Accounts Payable $
Mortgage on land ( 18000 - 9000 ) $

12,500.00
5,000.00
9,000.00

Total $ 53,470.00

Condition : Smith received a bonafide offer of $33,000 for the business; although his equity was th
rejected the offer. It was evident that the store had already acquired goodwill of $6,030.became no
this half.
Transaction as on : 11th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity $ 26,970.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Total $ 53,470.00

Condition : Smith withdrew $1,000 cash from the stores bank account for his personal use.

Transaction as on : 12th Jan 2010

Liabilities and Equities
Amount
$
Owner's Equity ( 26970 - Divident to share
$ 25,970.00
holder - to owner : 1000 )
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Total $ 52,470.00

Condition : Smith took merchandise costing $750 from the stores inventory for his personal use.
Transaction as on : 13th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity ( 25970 - Divident to owner
$ 25,220.00
as goods: 750 )
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Total $ 51,720.00

Condition : Smith learned that the individual who purchased the land (on Jan. 10) subsequently sol
lot still owned by Music Mart, Inc., was identical in value with this other plot.
Transaction as on : 14th Jan 2010
Liabilities and Equities
Amount
$
Owner's Equity $ 25,220.00
Note Payables ( Loan ) $ 12,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Total $ 51,720.00

Condition : The store paid off $6,000 of its note payable (disregard interest).
Liabilities and Equities

Transaction as on : 14th Jan 2010

Amount
$
Owner's Equity $ 25,220.00

Note Payables ( Loan ) ( 12500 - 6000 ) $

Accounts Payable $
Mortgage on land $

6,500.00
5,000.00
9,000.00

Total $ 45,720.00

Condition : Smith sold one-third of the stock he owned in Music Mart, Inc., for $11,000 cash.
Liabilities and Equities

Transaction as on : 15th Jan 2010

Amount
$
Owner's Equity $ 25,220.00
Note Payables ( Loan ) $
6,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Total $ 45,720.00

Condition : Merchandise costing $850 was sold for $1,310, which was received in cash.
Transaction as on : 31th Jan 2010
Amount
$
Owner's Equity ( 25220 - 460 ) $ 25,680.00
Note Payables ( Loan ) $
6,500.00
Accounts Payable $
5,000.00
Mortgage on land $
9,000.00

Liabilities and Equities

Total $ 46,180.00

nd tape store called Music Mart, Inc. on 1st January, 2010. He did this
count that he has opened in the name of the business entity and took
owner of the corporation.

tion as on : 1st Jan 2010

Assets

Amount
$
Cash $ 25,000.00
Total

$ 25,000.00

k; the loan was evidenced by a legal document called note.

tion as on : 2nd Jan 2010

Assets

Amount
$
Cash ( 25000 + 12500 ) $ 37,500.00

Total

$ 37,500.00

handise it intended to sell) in the amount of $5000, paying cash.

tion as on : 3rd Jan 2010

Assets

Amount
$
Cash ( 37500 - 5000 ) $ 32,500.00
Inventory $
5,000.00
Total

$ 37,500.00

0, for $750 in cash.

tion as on : 4th Jan 2010

Assets

Amount
$
Cash ( 32500 + 750 ) $ 33,250.00
Inventory ( 5000 - 500 ) $
4,500.00
Total

$ 37,750.00

handise for inventory for $5,000, agreeing to pay within 30 days.

tion as on : 5th Jan 2010

Assets

Amount
$
Cash $ 33,250.00
Inventory ( 4500 + Purchased incentory @
$
9,500.00
5000 )

Total

$ 42,750.00

$2,300, which was received in cash.

tion as on : 6th Jan 2010

Assets

Amount
$
Cash ( 33250 + 2300 ) $ 35,550.00
Inventory ( 9500 - 1500 ) $
8,000.00

Total

$ 43,550.00

$2,620, the customers agreeing to pay $2,620 within 30 days.

tion as on : 7th Jan 2010

Assets

Amount
$
Cash $ 35,550.00
Inventory ( 8000 - 1700 ) $
6,300.00
Accounts Receivables $
2,620.00
Total

$ 44,470.00

urance policy for $1,224, paying cash.

tion as on : 8th Jan 2010

Assets

Amount
$
Cash ( 35500 - 1224 ) $ 34,326.00
Inventory $
6,300.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00
Total

$ 44,470.00

equal size for a total of $24,000. It paid $6,000 in cash and gave a 10-

tion as on : 9th Jan 2010

Assets

Amount
$
Land $ 24,000.00
Cash ( 34326 - 6000 ) $ 28,326.00
Inventory $
6,300.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00
Total

$ 62,470.00

d for $12,000. It received $3,000 cash, and in addition, the buyer

rt, Inc., became no longer responsible for this half.

ion as on : 10th Jan 2010

Assets

Amount
$

Land ( 24000 - cost of 1 lot land @ 12000 ) $

Cash ( 28326 + 3000 )
Inventory
Accounts Receivables
Prepaid Insurance
Total

$
$
$
$

12,000.00
31,326.00
6,300.00
2,620.00
1,224.00

$ 53,470.00

00 for the business; although his equity was then only $26,970, he
already acquired goodwill of $6,030.became no longer responsible for

ion as on : 11th Jan 2010

Assets

Amount
$
Land $ 12,000.00
Cash $ 31,326.00
Inventory $
6,300.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00

ores bank account for his personal use.

Total

$ 53,470.00

ion as on : 12th Jan 2010

Assets

Amount
$
Land $

Cash ( 31326 - Divident equity : 1000 )

Inventory
Accounts Receivables
Prepaid Insurance
Total

$
$
$
$

12,000.00
30,326.00
6,300.00
2,620.00
1,224.00

$ 52,470.00

om the stores inventory for his personal use.

ion as on : 13th Jan 2010

Assets

Amount
$
Land $
Cash
Inventory ( 6300 - 750 )
Accounts Receivables
Prepaid Insurance
Total

$
$
$
$

12,000.00
30,326.00
5,550.00
2,620.00
1,224.00

$ 51,720.00

urchased the land (on Jan. 10) subsequently sold it for $ 14,000. The
alue with this other plot.
ion as on : 14th Jan 2010
Assets
Amount
$
Land $ 12,000.00
Cash $ 30,326.00
Inventory ( 6300 - 750 ) $
5,550.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00
Total

$ 51,720.00

able (disregard interest).

ion as on : 14th Jan 2010

Assets

Amount
$
Land $ 12,000.00

Cash ( 30326 - 6000 )

Inventory ( 6300 - 750 )
Accounts Receivables
Prepaid Insurance
Total

$
$
$
$

24,326.00
5,550.00
2,620.00
1,224.00

$ 45,720.00

ed in Music Mart, Inc., for $11,000 cash.

ion as on : 15th Jan 2010

Assets

Amount
$
Land $ 12,000.00
Cash $ 24,326.00
Inventory $
5,550.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00
Total

$ 45,720.00

1,310, which was received in cash.

ion as on : 31th Jan 2010

Assets

Amount
$
Land $ 12,000.00
Cash ( 24326 + 1310 ) $ 25,636.00
Inventory ( 5550 - 850 ) $
4,700.00
Accounts Receivables $
2,620.00
Prepaid Insurance $
1,224.00
Total

$ 46,180.00