Learning Objectives : Explain what a transaction is; analyze the impact of transactions on accounts.
Assume Dresses Unlimited opened a store in San Antonio, starting with cash and common stock of $150,000. Patti Brown, the store manager, then signed a note payable to purchase land for $75,000 and a building for $204,000. Brown also paid $39,000 for equipment and $6,100 for supplies to use in the business.
Suppose the home office of Dresses Unlimited requires a weekly report from store managers.
Write Brown'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.