The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton. Assets Liab. Owner's Equity Accts. Accts. + Supp. +Equip. 3,100+ 5,900 + 33,900- T.Cotton, Capital + 50,900 + Cash Rec. Rev. Balances, May 1 Paid for utilities New balances Sold services for cash New balances Paid a creditor New balances Sold services on credit New balances Paid salaries New balances Pald telephone bill New balances withdrew cash for personal expenses Pay. 15,100 + Exp 7,100+ 870 +870 14,230 + 3,100 5,900 + 33,900 7,100+ 5e,900 + 870 +4,870 + 4,870 4,070 19,100+ E150 16,950+ 7,100 + 2,150 4,950+ 3,100 +5,900+ 33,900. 50,900 + 870 3,100 5,900 33,900- 2,950 6,050 +5,900 + 33,900- 50,900 + 4,870 +2,950 7,820 870 16,950 + 4,950 + 50,900 + 870 8,950 +8,950 9,820 6,050 + 5,900 33,900- 4,950 + 50,900 + 7,820 8,000 + -315 +315 5e,900 + 1,900 49,000+ 4,950+ 7,685+ 1,900 5,785 + 6,050+ 5,900 +33,900- 7,820- 10,135 New balances 6,050 + 5,900 + 33,900- 4,950+ 7,820- 10,135 Required: Analyze each transaction carefully. Prepare an income statement and a statement of owner's equity for the month. Prepare a balan chant for M 24 20

The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton. Assets Liab. Owner's Equity Accts. Accts. + Supp. +Equip. 3,100+ 5,900 + 33,900- T.Cotton, Capital + 50,900 + Cash Rec. Rev. Balances, May 1 Paid for utilities New balances Sold services for cash New balances Paid a creditor New balances Sold services on credit New balances Paid salaries New balances Pald telephone bill New balances withdrew cash for personal expenses Pay. 15,100 + Exp 7,100+ 870 +870 14,230 + 3,100 5,900 + 33,900 7,100+ 5e,900 + 870 +4,870 + 4,870 4,070 19,100+ E150 16,950+ 7,100 + 2,150 4,950+ 3,100 +5,900+ 33,900. 50,900 + 870 3,100 5,900 33,900- 2,950 6,050 +5,900 + 33,900- 50,900 + 4,870 +2,950 7,820 870 16,950 + 4,950 + 50,900 + 870 8,950 +8,950 9,820 6,050 + 5,900 33,900- 4,950 + 50,900 + 7,820 8,000 + -315 +315 5e,900 + 1,900 49,000+ 4,950+ 7,685+ 1,900 5,785 + 6,050+ 5,900 +33,900- 7,820- 10,135 New balances 6,050 + 5,900 + 33,900- 4,950+ 7,820- 10,135 Required: Analyze each transaction carefully. Prepare an income statement and a statement of owner's equity for the month. Prepare a balan chant for M 24 20

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 23EB: Post the following August transactions to T-accounts for Accounts Payable and Supplies, indicating...

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Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May: 1. Received cash in exchange for common stock, 18,000. 2. Paid advertising expense, 4,850. 3. Purchased supplies on account, 2,100. 4. Billed customers for delivery services on account, 14,700. 5. Received cash from customers on account, 8,200. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by 18,000; Common Stock increases by 18,000.
EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first month (March 20--), the following transactions occurred. Show the effect of each transaction on the accounting equation: Assets= Liabilities + Owners Equity. After each transaction, show the new account totals. (a) Invested cash in the business, 30,000. (b) Bought office equipment on account, 4,500. (c) Bought office equipment for cash, 1,600. (d) Paid cash on account to supplier in transaction (b), 2,000. EFFECTS OF TRANSACTIONS (REVENUE, EXPENSE, WITHDRAWALS) This exercise is an extension of Exercise 2-3B. Lets assume Jon Wallace completed the following additional transactions during March. Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets = Liabilities + Owners Equity (Capital Drawing + Revenues Expenses). After transaction (k), report the totals for each element. Demonstrate that the accounting equation has remained in balance. (e) Performed services and received cash, 3,000. (f) Paid rent for March, 1,000. (g) Paid March phone bill, 68. (h) Jon Wallace withdrew cash for personal use, 800. (i) Performed services for clients on account, 900. (j) Paid wages to part-time employee, 500. (k) Received cash for services performed on account in transaction (i), 500.
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In March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow. a. Carter deposited 25,000 in a bank account in the name of the business. b. Bought a used truck from Degroot Motors for 15,140, paying 5,140 in cash and placing the remainder on account. c. Bought equipment on account from Flemming Company, 3,450. d. Paid the rent for the month, 1,000, Ck. No. 3001 (Rent Expense). e. Sold services for cash for the first half of the month, 6,927 (Service Income). f. Bought supplies for cash, 301, Ck. No. 3002. g. Bought insurance for the truck for the year, 1,200, Ck. No. 3003. h. Received and paid the bill for utilities, 349, Ck. No. 3004 (Utilities Expense). i. Received a bill for gas and oil for the truck, 218 (Gas and Oil Expense). j. Sold services on account, 3,603 (Service Income). k. Sold services for cash for the remainder of the month, 4,612 (Service Income). l. Paid wages to the employees, 3,958, Ck. Nos. 30053007 (Wages Expense). m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. 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.
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Journal entries and trial balance On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 40,000. b. Paid rent on office and equipment for the month, 4,800. c. Purchased supplies on account, 2,150. d. Paid creditor on account, 1,100. e. Earned sales commissions, receiving cash, 18,750. f. Paid automobile expenses (including rental charge) for month, 1,580, and miscellaneous expenses, 800. g. Paid office salaries, 3,500. h. Determined that the cost of supplies used was 1,300. i. Paid dividends, 1,500. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of October 31, 20Y6. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for October. 5. Determine the increase or decrease in retained earnings for October.
Journal entries and trial balance On August 1, 20Y7, Rafael Masey established Planet Realty, which completed the following transactions during the month: a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 17,500. b. Purchased supplies on account, 2,300. c. Earned sales commissions, receiving cash, 13,300. d. Paid rent on office and equipment for the month, 3,000. e. Paid creditor on account, 1,150. f. Paid dividends, 1,800. g. Paid automobile expenses (including rental charge) for month, 1,500, and miscellaneous expenses, 400. h. Paid office salaries, 2,800. i. Determined that the cost of supplies used was 1,050. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of August 31, 20Y7. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for August. 5. Determine the increase or decrease in retained earnings for August.
Effects of transactions on Accounting equation On Time Delivery Service had the following selected transactions during November: 1. Received cash from issuance of common stock, $75,000. 2. Paid rent for November, $5000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (9), in a vertical column, and inserting at the right of each number the appropriate letter from he following list: a. Increase in an asset, decrease in another asset. h. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders’ equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders equity.
TRANSACTION ANALYSIS George Atlas started a business on June 1,20--. Analyze the following transactions for the first month of business using T accounts. Label each T account with the title of the account affected and then place the transaction letter and the dollar amount on the debit or credit side. (a ) Invested cash in the business, 7,000. (b) Purchased equipment for cash, 900. (c) Purchased equipment on account, 1,500. (d) Paid cash on account for equipment purchased in transaction (c), 800. (e) Withdrew cash for personal use, 1,100. FOOT AND BALANCE T ACCOUNTS Foot and balance the T accounts prepared in Exercise 3-5B if necessary.