Chapter 2—Demonstration Problem

Stadium Parking was organized on July 1 to operate a parking lot near a new sports arena. The following
transactions occurred during July, prior to the company beginning its regular business operations:
July 1 Martin Taylor opened a bank account in the name of the business with a deposit of $45,000 cash.
July 2 Purchased land to be used as the parking lot for a total price of $140,000. A cash down payment of
$28,000 was made and a note payable was issued for the balance of the purchase price.
July 5 Purchased a small, portable building for $4000 cash. The purchase price included installation of the
building on the parking lot.
July 12 Purchased office equipment on credit from Suzuki & Co. for $3000.
July 28 Paid $2000 of the amount owed to Suzuki & Co.

The account titles and the account numbers used by Stadium Parking to record these transactions are:
Cash . . . . . . 1 Notes Payable . . . . . 30
Land . . . . . . 20 Accounts Payable . . . . 32
Building . . . . . 22 Martin Taylor, Capital . 50
Office Equipment . 25
Instructions: (1) Prepare journal entries for the month of July; (2) Post to ledger accounts of the three-
column, running-balance form; (3) Prepare a trial balance at July 31.
Stadium Parking
Trial Balance
July 31, 2010

Cash $11,000
Land 140,000
Building 4,000
Office Equipment 3,000
Notes Payable 112,000
Accounts Payable 1,000
Martin Taylor, Capital 45,000
$158,000 $158,000