127. Rolla Company was founded in 2010. It acquired $30,000 cash by issuing stock to investors and an additional $20,000 cash by borrowing from creditors. During 2010 it received $15,000 cash revenues...

127. Rolla Company was founded in 2010. It acquired $30,000 cash by issuing stock to investors and an additional $20,000 cash by borrowing from creditors. During 2010 it received $15,000 cash revenues and paid $22,000 in cash expenses. The company then went out of business.
Required: a) Explain the term, "business liquidation."
b) What amount of cash should Rolla Company have had on hand immediately before going out of business?
c) What amount of cash will Rolla's creditors receive?
d) What amount of cash will Rolla's stockholders receive?

128. The transactions listed below apply to Lambert Company for its first year in business. Assume that all transactions involve the receipt or payment of cash.
Transactions for the year 2011:
1) Issued common stock to investors for $15,000 cash.
2) Borrowed $8,000 from the local bank.
3) Provided services to customers for $18,000.
4) Paid expenses amounting to $11,400.
5) Purchased a plot of land costing $12,000.
6) Paid a dividend of $6,000 to its stockholders.
7) Repaid $4,000 of the loan listed in item 2.
Required: (a) Fill in the headings to the accounting equation shown below.
(b) Show the effects of the above transactions on the accounting equation