Owner manager Nicole Cade established Athletic

Performance Company as a sole #6981

Owner-manager Nicole Cade established Athletic Performance Company as a sole
proprietorship on July 1, 2010. The company's chart of accounts included the following:During
the month of July, the company had the following activities:(a) Received $200,000 cash from
Nicole Cade.(b) Borrowed $30,000 cash from a local bank, payable June 30, 2012.(c) Bought a
factory building for $141,000; paid $41,000 in cash and signed a three-year note for the
balance.(d) Paid cash for equipment that cost $100,000.(e) Purchased supplies for $10,000 on
account.Required:1. Analyze transactions (a)-(e) to determine their effects on the accounting
equation. Use the format shown in the demonstration case on page 71.2. Record the
transaction effects determined in requirement 1 using a journal entry format.3. Summarize the
journal entry effects from requirement 2 using T-accounts.4. Prepare a classified balance sheet
at July 31, 2010.5. As of July 31, 2010, has the financing for Athletic Performance Company's
assets primarily come from liabilities or owner's equity?View Solution:
Owner manager Nicole Cade established Athletic Performance Company as a sole

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