Swish Watch Corporation manufactures, sells, and services expensive, ugly watches. The company has been in business for three years. At the end of the most recent year, 2006, the accounting records reported total assets of $2,255,000 and total liabilities

Event	Assets				=	Liabilities	+	Stockholders' Equity
	Cash	Notes Receivable	Equipment	Building	=	Notes Payable		Contributed Capital	Retained Earnings
a)	109,000				=		109,000
b)	186,000				=	186,000
c)					=		5,000		5,000
d)				200,000	=
e)	12,000	32,000	44,000		=	40,000
f)	4,000	28,000	40,000		=	36,000
g)	2,000	2,000			=	2,000
Totals	313,000	62,000	84,000	200,000	=	224,000	114,000

Explanation: The table represents the changes to Swish Watch Corporation's assets, liabilities, and stockholders' equity after the events of 2007. a) The company issued additional shares of stock for $109,000 cash, which increased the cash and contributed capital accounts. b) The company borrowed $186,000 cash from the bank and signed a 10-year note, increasing the cash balance and creating a new liability in the form of notes payable. c) One of the stockholders sold $5,000 of their capital stock in the company to another investor, which transferred $5,000 from retained earnings to contributed capital. d) The company built an addition on their factory for $200,000, paid in cash, which increased the building account. e) The company purchased equipment for the new addition for $44,000, paid $12,000 in cash, and signed a six-month note for the balance. This increased the equipment and notes payable accounts, and decreased the cash account. f) The company returned a defective piece of equipment from (e), receiving a cash refund of $4,000. This decreased the equipment and notes payable accounts, and increased the cash account. g) The company lent $2,000 cash to the company president, Thor Gunn arson, in 2006, and he signed a note with terms requiring repayment of the loan in one year. The loan and note receivable accounts were not changed until Thor repaid the loan. The table shows that the company's total assets increased by $213,000 ($2,255,000 at the end of 2006 to $2,468,000 at the end of 2007), while their total liabilities increased by $44,000 ($1,780,000 to $1,824,000). Their total stockholders' equity increased by $114,000 ($0 at the end of 2006 to $114,000 at the end of 2007) because of the issuance of additional shares of stock and the sale of shares by one of the stockholders.