Steve Limberg established The Swimmer s Cove a sole

proprietorship selling #6989

Steve Limberg established The Swimmer's Cove, a sole proprietorship selling swimming
apparel and equipment, in 2006. At December 31, 2011, the accounting records reflected total
assets of $850,000 and total liabilities of $375,000. During the current year, 2012, the following
summarized events occurred:(a) Borrowed $10,000 cash from the local bank and signed a six-
month note.(b) Purchased a warehouse for $300,000 and a delivery van for $40,000; paid cash
of $50,000 and signed a 20-year note for the rest.(c) Ordered $150,000 in merchandise to be
delivered in January 2013.(d) Received an additional investment of $60,000 cash from owner
Steve Limberg.(e) Sold the delivery van to another business for $40,000; received $10,000 cash
and the rest on a two-year note due from the other company.(f) Purchased a short-term
investment for $30,000 cash.(g) Steve Limberg withdrew $25,000 cash from the
business.Required:1. Complete the spreadsheet that follows, using plus (+) for increases and
minus (?) for decreases for each account. The first transaction is used as an example.2. Did you
include event ( c ) in the spreadsheet? Why or why not?3. Based on beginning balances plus
the completed spreadsheet, provide the following amounts (show computations):a. Total assets
at the end of the year.b. Total liabilities at the end of the year.c. Total owner's equity at the end
of the year.4. As of December 31, 2012, has the financing for The Swimmer's Cove's assets
primarily come from liabilities or owner's equity?View Solution:
Steve Limberg established The Swimmer s Cove a sole proprietorship selling

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