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On May 1, B. Bangle opened Self-Wash Laundry. His accountant listed the following chart of accounts: The following transactions were completed during May: a. Bangle deposited $35,000 in a bank account in the name of the business. b. Bought chairs and tables, paying cash, $1,870, Ck. No. 1000. c. Bought supplies on account from Barnes Supply Company, $225. d. Paid the rent for the current month, $875, Ck. No. 1001. e. Bought washing machines and dryers from Lara Equipment Company, $12,500, paying $3,600 in cash and placing the balance on account, Ck. No. 1002. f. Sold services for cash for the first half of the month, $1,925. g. Bought insurance for one year, $1,560, Ck. No. 1003. h. Paid on account to Lara Equipment Company, $1,800, Ck. No. 1004. i. Received and paid electric bill, $285, Ck. No. 1005. j. Sold services for cash for the second half of the month, $1,835. k. Paid wages to an employee, $940, Ck. No. 1006. l. Bangle withdrew cash for his personal use, $800, Ck. No. 1007. m. Paid on account to Barnes Supply Company, $225, Ck. No. 1008. n. Received and paid bill from the county for sidewalk repair assessment, $280, Ck. No. 1009. Required 1. Record the owner’s 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 the 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 as of May 31, 20--. 6. Prepare an income statement for May 31, 20--. 7. Prepare a statement of owner’s equity for May 31, 20--. 8. Prepare a balance sheet as of May 31, 20--.

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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 2, Problem 4PA
Textbook Problem

On May 1, B. Bangle opened Self-Wash Laundry. His accountant listed the following chart of accounts:

Chapter 2, Problem 4PA, On May 1, B. Bangle opened Self-Wash Laundry. His accountant listed the following chart of accounts:

The following transactions were completed during May:

  1. a. Bangle deposited $35,000 in a bank account in the name of the business.
  2. b. Bought chairs and tables, paying cash, $1,870, Ck. No. 1000.
  3. c. Bought supplies on account from Barnes Supply Company, $225.
  4. d. Paid the rent for the current month, $875, Ck. No. 1001.
  5. e. Bought washing machines and dryers from Lara Equipment Company, $12,500, paying $3,600 in cash and placing the balance on account, Ck. No. 1002.
  6. f. Sold services for cash for the first half of the month, $1,925.
  7. g. Bought insurance for one year, $1,560, Ck. No. 1003.
  8. h. Paid on account to Lara Equipment Company, $1,800, Ck. No. 1004.
  9. i. Received and paid electric bill, $285, Ck. No. 1005.
  10. j. Sold services for cash for the second half of the month, $1,835.
  11. k. Paid wages to an employee, $940, Ck. No. 1006.
  12. l. Bangle withdrew cash for his personal use, $800, Ck. No. 1007.
  13. m. Paid on account to Barnes Supply Company, $225, Ck. No. 1008.
  14. n. Received and paid bill from the county for sidewalk repair assessment, $280, Ck. No. 1009.

Required

  1. 1. Record the owner’s name in the Capital and Drawing T accounts.
  2. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
  3. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
  4. 4. Foot the T accounts and show the balances.
  5. 5. Prepare a trial balance as of May 31, 20--.
  6. 6. Prepare an income statement for May 31, 20--.
  7. 7. Prepare a statement of owner’s equity for May 31, 20--.
  8. 8. Prepare a balance sheet as of May 31, 20--.

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