Q1: Jania Corporation was organized on December 1 of the current year and had the following

account balances at December 31, listed in tabular form:

Owners’
Assets = Liabilities + Equity

Office Notes Accounts Capital

Cash + Land Building + Equipment = Payable + Payable + Stock
Balances $15,000 $90,000 $87,000 $42,700 $60,000 $74,700 $100,000

Early in January, the following transactions were carried out by Jania Corporation:
1. Sold capital stock to owners for $30,000.
2. Purchased land and a small office building for a total price of $100,000, of which
$40,000 was the value of the land and $60,000 as the value of the building. Paid $20,000
in cash and signed a note payable for the remaining $80,000.
3. Bought several computer systems on credit for $9,000 (30-day open account).
4. Obtained a loan from 1st Bank in the amount of $10,000. Signed a note payable.
5. Paid the $5,000 account payable due as of December 31.

Q2: The items making up the balance sheet of Jones Delivery at December 31 are listed below in
tabular form similar to the illustration of the accounting equation in Chapter 2 of the text.

Owners’
Assets = Liabilities + Equity

Accounts Office Notes Accounts Capital

Cash + Receivable Trucks + Equipment = Payable + Payable + Stock
Balances $8,200 $9,600 $65,000 $4,000 $15,000 $6,100 $65,700

During a short period after December 31, Jones Delivery had the following transactions:
1. Bought office equipment at a cost of $3,200. Paid cash.
2. Collected $5,000 of accounts receivable.
3. Paid $1,200 of accounts payable.
4. Borrowed $8,000 from a bank. Signed a note payable for that amount.
5. Purchased two trucks for $40,000. Paid $10,000 cash and signed a note payable for the
balance.
6. Sold additional stock to investors for $22,000.
Q3: Dr. Filler, DMD, opened a dental clinic on August 1. The business transactions for August
are shown below:

Aug. 1 Dr. Filler invested $250,000 cash in the business in exchange for 1,000 shares of
capital stock.
Aug. 4 Land and a building were purchased for $320,000. Of this amount, $85,000
applied to the land, and $235,000 to the building. A cash payment of $100,000
was made at the time of the purchase, and a note payable was issued for the
remaining balance.
Aug. 9 Medical instruments were purchased for $62,000 cash.
Aug. 16 Office fixtures and equipment were purchased for $30,000. Dr. Filler paid $5,000
at the time of purchase and agreed to pay the entire remaining balance in 15 days.
Aug. 21 Office supplies expected to last several months were purchased $3,500 cash.
Aug. 24 Dr. Filler billed patients $2,500 for services rendered. Of this amount, $1,200
was received in cash, and $1,300 was billed on account (due in 30 days).
Aug. 27 A $500 invoice was received for several newspaper advertisements placed in
August. The entire amount is due on September 8.
Aug. 28 Received a $400 payment on the $6,300 account receivable recorded August 24.
Aug. 31 Paid employees $2,700 for salaries earned in August.

A partial list of account titles used by Dr. Filler includes:

Cash Notes Payable
Accounts Receivable Account Payable
Office Supplies Capital Stock
Medical Instruments Service Revenue
Office Fixtures and Equipment Advertising Expense
Land Salary Expense
Building