E2-14A (Learning Objectives 1, 4: Explain what a transaction is; analyze the impact of transactions on accounts) Assume Casual Wear opened a store in San Francisco, starting with cash and common stock of $98,000. Nicole Marchildon, the store manager, then signed a note payable to purchase land for $94,000 and a building for $122,000. Marchildon also paid $58,000 for equipment and $15,000 for supplies to use in the business.
Suppose the home office of Casual Wear requires a weekly report from store managers. Write Marchildon’s memo to the home office to report on her purchases. Include the store’s balance sheet as the final part of your memo. Prepare a T-account to compute the balance for Cash.