Problem 1. Mr. Amer started his Car Repair Business in Muscat in June 2020. During the month of June, che following transactions occurred: June 1 Amer opened the business by investing OMR 300,000. June 2 Purchased Computers for OMR 3,500 and immediately paid OMR 2,000 cash and promised the supplier to pay the remaining amount in the future. June 5 Purchased supplies on account for OMR 10,500. June 6 Provided repair service to a customer, OMR 7,600. The customer paid OMR 3,000 and the remaining will be paid in the near future. June 10 Paid the remaining amount of OMR 1500 for the Computers bought June 2nd. June 15 Provided renair service to a customer on account OMR 40 000

Problem 1. Mr. Amer started his Car Repair Business in Muscat in June 2020. During the month of June, che following transactions occurred: June 1 Amer opened the business by investing OMR 300,000. June 2 Purchased Computers for OMR 3,500 and immediately paid OMR 2,000 cash and promised the supplier to pay the remaining amount in the future. June 5 Purchased supplies on account for OMR 10,500. June 6 Provided repair service to a customer, OMR 7,600. The customer paid OMR 3,000 and the remaining will be paid in the near future. June 10 Paid the remaining amount of OMR 1500 for the Computers bought June 2nd. June 15 Provided renair service to a customer on account OMR 40 000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 19EB: A business has the following transactions: A. The business is started by receiving cash from an...

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The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.
On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, 18,000. 4.Paid rent for period of October 4 to end of month, 3,000. 10.Purchased a used truck for 23,750, paying 3,750 cash and giving a note payable for the remainder. 13.Purchased equipment on account, 10,500. 14.Purchased supplies for cash, 2,100. 15.Paid annual premiums on property and casualty insurance, 3,600. 15.Received cash for job completed, 8,950. Enter the following transactions on Page 2 of the two-column journal: 21.Paid creditor a portion of the amount owed for equipment purchased on October 13, 2,000. 24.Recorded jobs completed on account and sent invoices to customers, 14,150. 26.Received an invoice for truck expenses, to be paid in November, 700. 27.Paid utilities expense, 2,240. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal use, 3,500. Instructions 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2019. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?
A business has the following transactions: A. The business is started by receiving cash from an investor in exchange for common stock $10,000. B. Rent of $1,250 is paid for the first month. C. Office supplies are purchased for $375. D. Services worth $3,450 are performed. Cash is received for half. E. Customers pay $1,250 for services to be performed next month. F. $6,000 is paid for a one year insurance policy. G. We receive 25% of the money owed by customers in D. H. A customer has placed an order for $475 of services to be done this coming week. How much total revenue does the company have?
Domingo Company started its business on January 1, 2019. The following transactions occurred during the month of May. Prepare the journal entries in the journal on Page 1. A. The owners invested $10,000 from their personal account to the business account. B. Paid rent $500 with check #101. C. Initiated a petty cash fund $500 with check #102. D. Received $1,000 cash for services rendered. E. Purchased office supplies for $158 with check #103. F. Purchased computer equipment $2,500, paid $1,350 with check #104, and will pay the remainder in 30 days. G. Received $800 cash for services rendered. H. Paid wages $600, check #105. I. Petty cash reimbursement: office supplies $256, maintenance expense $108, postage expense $77, miscellaneous expense $55. Cash on hand $11. Check #106. J. Increased petty cash by $30, check #107.
Hajun Company started its business on May 1, 2019. The following transactions occurred during the month of May. Prepare the journal entries in the journal on Page 1. A. The owners invested $5,000 from their personal account to the business account. B. Paid rent $400 with check #101. C. Initiated a petty cash fund $200 check #102. D. Received $400 cash for services rendered E. Purchased office supplies for $90 with check #103. F. Purchased computer equipment $1,000, paid $350 with check #104 and will pay the remainder in 30 days. G. Received $500 cash for services rendered. H. Paid wages $250, check #105. I. Petty cash reimbursement office supplies $25, Maintenance Expense $125, Miscellaneous Expense $35. Cash on hand $18. Check #106. J. Increased Petty Cash by $50, check #107.
Taylor Company recently purchased a piece of equipment for $2,000 which will be paid within 30 days after delivery. At what point would the event be recorded in Taylors accounting system? When Taylor signs the agreement with the seller When Taylor receives an invoice (a bill) from the setter When Taylor receives the asset from the seller When Taylor pays $2.000 cash to the seller
Lavender Company started its business on April 1, 2019. The following are the transactions that happened during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $7,500 from their personal account to the business account. B. Paid rent $600 with check #101. C. Initiated a petty cash fund $250 check #102. D. Received $350 cash for services rendered. E. Purchased office supplies for $125 with check #103. F. Purchased computer equipment $1,500, paid $500 with check #104, and will pay the remainder in 30 days. G. Received $750 cash for services rendered. H. Paid wages $375, check #105. I. Petty cash reimbursement Office Supplies $50, Maintenance Expense $80, Miscellaneous Expense $60. Cash on hand $8. Check #106. J. Increased Petty Cash by $70, check #107.
Inner Resources Company started its business on April 1, 2019. The following transactions occurred during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $8,500 from their personal account to the business account. B. Paid rent $650 with check #101. C. Initiated a petty cash fund $550 check #102. D. Received $750 cash for services rendered. E. Purchased office supplies for $180 with check #103. F. Purchased computer equipment $8,500, paid $1,600 with check #104 and will pay the remainder in 30 days. G. Received $1,200 cash for services rendered. H. Paid wages $560, check #105. I. Petty cash reimbursement office supplies $200, Maintenance Expense $140, Miscellaneous Expense $65. Cash on Hand $93. Check #106. J. Increased Petty Cash by $100, check #107.
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, 4,500. 5. Received cash from clients on account, 2,450. 9. Paid cash for a newspaper advertisement, 225. 13. Paid Office Station Co. for part of the debt incurred on April 5, 640. 15. Provided services on account for the period May 115, 9,180. 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, 750. 17. Received cash from cash clients for fees earned during the period May 116, 8,360. Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Provided services on account for the period May 1620, 4,820. 25. Received cash from cash clients for fees earned for the period May 1723, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks' salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Received cash from cash clients for fees earned for the period May 2631, 3,300. 31. Provided services on account for the remainder of May, 2,650. 31. Kelly withdrew 10,500 for personal use. Instructions 1.The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column Journalize each of the May transactions in a two column Journal starting on Page 5 of the journal and using Kelly Consulting's chart of accounts. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 3Prepare an unadjusted trial balance. 4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a.Insurance expired during May is 275. b.Supplies on hand on May 3 1 are 715. c.Depreciation of office equipment for May is 330. d.Accrued receptionist salary on May 31 is 325. e.Rent expired during May is 1,600. f.Unearned fees on May 31 are 3,210. 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of owner's equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.
In October, A. Nguyen established an apartment rental service. The account headings are presented below. Transactions completed during the month of October follow. a. Nguyen deposited 25,000 in a bank account in the name of the business. b. Paid the rent for the month, 1,200, Ck. No. 2015 (Rent Expense). c. Bought supplies on account, 225. d. Bought a truck for 18,000, paying 1,000 in cash and placing the remainder on account. e. Bought insurance for the truck for the year, 1,400, Ck. No. 2016. f. Sold services on account, 5,000 (Service Income). g. Bought office equipment on account from Henry Office Supply, 2,300. h. Sold services for cash for the first half of the month, 6,050 (Service Income). i. Received and paid the bill for utilities, 150, Ck. No. 2017 (Utilities Expense). j. Received a bill for gas and oil for the truck, 80 (Gas and Oil Expense). k. Paid wages to the employees, 1,400, Ck. Nos. 20182020 (Wages Expense). l. Sold services for cash for the remainder of the month, 4,200 (Service Income). m. Nguyen withdrew cash for personal use, 2,000, Ck. No. 2021. Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.
In October, A. Nguyen established an apartment rental service. The account headings are presented below. Transactions completed during the month of October follow. a. Nguyen deposited 25,000 in a bank account in the name of the business. b. Paid the rent for the month, 1,200, Ck. No. 2015. c. Bought supplies on account, 225. d. Bought a truck for 18,000, paying 1,000 in cash and placing the remainder on account e. Bought Insurance for the truck for the yean 1,400, Ck. No. 2016. f. Sold services on account 5,000. g. Bought office equipment on account from Henry Office Supply, 2,300. h. Sold services for cash for the first half of the month, 6,050. i. Received and paid the bill for utilities, 150, Ck. No. 2017. j. Received a bill for gas and oil for the truck. 80. k. Paid wages to the employees, 1,400, Ck Nos. 20182020. l. Sold services for cash for the remainder of the month, 4,200. m. Nguyen withdrew cash for personal use, 2,000, Ck. No. 2021. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, reanalyze each transaction.
B. Kelso established Computer Wizards during November of this year. The accountant prepared the following chart of accounts: The following transactions occurred during the month: a. Kelso deposited 45,000 in a bank account in the name of the business. b. Paid the rent for the current month, 1,800, Ck. No. 2001. c. Bought office desks and filing cabinets for cash, 790, Ck. No. 2002. d. Bought a computer and printer from Cyber Center for use in the business, 2,700, paying 1,700 in cash and placing the balance on account, Ck. No. 2003. e. Bought a neon sign on account from Signage Co., 1,350. f. Kelso invested her personal computer software with a fair market value of 600 in the business. g. Received a bill from Country News for newspaper advertising, 365. h. Sold services for cash, 1,245. i. Received and paid the electric bill, 345, Ck. No. 2004. j. Paid on account to Country News, a creditor, 285, Ck. No. 2005. k. Sold services for cash, 1,450. l. Paid wages to an employee, 925, Ck. No. 2006. m. Received and paid the bill for the city business license, 75, Ck. No. 2007. n. Kelso withdrew cash for personal use, 850, Ck. No. 2008. o. Kelso withdrew cash for personal use, 850, Ck. No. 2008. Required 1. Record the owners name in the Capital and Drawing T accounts. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts. 3. Record the transactions in T accounts. Write the letter of each entry to identify the transaction. 4. Foot the T accounts and show the balances. 5. Prepare a trial balance, with a three-line heading, dated November 30, 20--.