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On March 1 of this year, B. Gervais established Gervais Catering Service. The account headings are presented below. Transactions completed during the month follow. a. Gervais deposited $25,000 in a bank account in the name of the business. b. Bought a truck from Kelly Motors for $26,329, paying $8,000 in cash and placing the balance on account, Ck. No. 500. c. Bought catering equipment on account from Luigi’s Equipment, $3,795. d. Paid the rent for the month, $1,255, Ck. No. 501. e. Bought insurance for the truck for one year, $400, Ck. No. 502. f. Sold catering services for cash for the first half of the month, $3,012. g. Bought supplies for cash, $185, Ck. No. 503. h. Sold catering services on account, $4,307. i. Received and paid the heating bill, $248, Ck. No. 504. j. Received a bill from GC Gas and Lube for gas and oil for the truck, $128. k. Sold catering services for cash for the remainder of the month, $2,649. l. Gervais withdrew cash for personal use, $1,550, Ck. No. 505. m. Paid the salary of the assistant, $1,150, Ck. No. 506. 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, re-analyze each transaction.

BuyFind

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570
BuyFind

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570

Solutions

Chapter
Section
Chapter 1, Problem 4PA
Textbook Problem

On March 1 of this year, B. Gervais established Gervais Catering Service. The account headings are presented below. Transactions completed during the month follow. Chapter 1, Problem 4PA, On March 1 of this year, B. Gervais established Gervais Catering Service. The account headings are

  1. a. Gervais deposited $25,000 in a bank account in the name of the business.
  2. b. Bought a truck from Kelly Motors for $26,329, paying $8,000 in cash and placing the balance on account, Ck. No. 500.
  3. c. Bought catering equipment on account from Luigi’s Equipment, $3,795.
  4. d. Paid the rent for the month, $1,255, Ck. No. 501.
  5. e. Bought insurance for the truck for one year, $400, Ck. No. 502.
  6. f. Sold catering services for cash for the first half of the month, $3,012.
  7. g. Bought supplies for cash, $185, Ck. No. 503.
  8. h. Sold catering services on account, $4,307.
  9. i. Received and paid the heating bill, $248, Ck. No. 504.
  10. j. Received a bill from GC Gas and Lube for gas and oil for the truck, $128.
  11. k. Sold catering services for cash for the remainder of the month, $2,649.
  12. l. Gervais withdrew cash for personal use, $1,550, Ck. No. 505.
  13. m. Paid the salary of the assistant, $1,150, Ck. No. 506.

Required

  1. 1. Record the transactions and the balance after each transaction.
  2. 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, re-analyze each transaction.

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