Exercise 2-5 Analyzing effects of a compound entry LO A1 Groro Co. bills a client $62,000 for services provided and agrees to accept the following three items in full payment: (1) $10,000 cash, (2) equipment worth $80,000, and (3) to assume responsibility for a $28,000 note payable related to the equipment. A) Analyze the transaction using the accounting equation.
Assets = Liabilities + Equity
Cash Equipment Note Payable Revenue
10,000 80,000 28,000 62,000
B) Record the transaction in journal entry form.
No Date General Journal Debit Credit
1 May 15 Cash 10,000
Equipment 80,000
Note payable 28,000
C) Post the entry using T-accounts to represent ledger accounts.
Cash 101 Note Payable
28000 10,000
Equipment 167 Revenue 404
80,000 62,000

Northern lights electronics just completed plans to distribute its new tablet. the product has several unique features that differentiate it from competitor products. the marketing team plans to begin a roll-out with to only one traditional retailer for the first two months. this strategy will give consumers the perception of the product’s stand-out personality and increase demand. marketing will proceed with for the next four months, where it plans to distribute to three other retailers, as well. for the last six months of the year, it will initiate distribution agreements with discount retailers and online retailers, and any other electronics store that wants to carry it. the marketing team is confident that the tablet will cycle through the first three stages of its product life cycle quickly. as the tablet reaches maturity during the second half of its first year in the market, it is good strategy to proceed with as described above. intensive distribution; selective distribution; exclusive distribution exclusive distribution; selective distribution; intensive distribution tertiary level distribution; secondary level distribution; mono-level distribution mono-level distribution; secondary level distribution; tertiary level distribution