Learning Objectives : Explain what a transaction is;

Aanalyze the impact of transactions on accounts.

Assume L. Deveta Fashions opened a store in New Orleans, starting with cash and common stock of $100,000.

Lori Lyons, the store manager, then signed a note payable to purchase land for $86,000 and a building for $125,000. Lyons also paid $43,000 for equipment and $7,500 for supplies to use in the business.

Suppose the home office of L. Deveta Fashions requires a weekly report from store managers. Write Lyon's memo to the head 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.