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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

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

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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--.

1.

To determine

Record the owners’ name in the Capital and drawing T-accounts.

Explanation

T-account:

T-account is the form of the ledger account, where the journal entries are posted to this account. It is referred to as the T-account, because the alignment of the co...

2, 3 & 4

To determine

Correctly place the plus and minus signs for each T-account and label the debit and credit sides of the accounts, Record the transactions in the T-accounts and write the letter of each entry to identify the transaction and show the balances.

5.

To determine

Prepare a trial balance as of May 31.

6.

To determine

Prepare an income statement for May 31.

7.

To determine

Prepare a statement of owners’ equity for May 31.

8.

To determine

Prepare a balance sheet as of May 31.

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