The following list contains events that occurred during

January 2011 #2277

The following list contains events that occurred during January 2011 at the local Ford dealer,
Malcom Motors:a. California Central University (CCU) signed a contract to purchase a fleet of
Ford Crown Victoria vehicles from Malcom Motors at a total price of $200,000, payable to
Malcom in two equal amounts on August 1, 2011, and September 1, 2011. The cars will be
delivered to CCU during August 2011.b. The principal stockholder in Malcom Motors sold 10
percent of her stock in the company to John Lewis, the president of Malcom Motors, in
exchange for $100,000 in cash.c. Malcom Motors issued new stock to John Lewis in exchange
for $50,000 in cash.d. Malcom Motors owns the building it occupies; the company occupied the
building during the entire month of January.e. Malcom Motors owns land used for the storage of
cars awaiting sale; the land was used by the company during the entire month of January.f.
Malcom Motors paid its lawyer $1,000 for services rendered in connection with the purchase
agreement signed with California Central University.g. Maintenance Management Company
performed cleaning services for Malcom Motors during January under a contract that does not
require payment for those services until March 1, 2011.Required:1. Indicate whether each item
qualifies as a transaction and should be recorded in the accounting system. Explain your
reasoning.2. Conceptual Connection: What concept is illustrated by the event in item b?View
Solution:
The following list contains events that occurred during January 2011

ANSWER
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