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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 July 1, K. Resser opened Resser’s Business Services. Resser’s accountant listed the following chart of accounts:

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The following transactions were completed during July:

  1. a. Resser deposited $25,000 in a bank account in the name of the business.
  2. b. Bought tables and chairs for cash, $725, Ck. No. 1200.
  3. c. Paid the rent for the current month, $1,750, Ck. No. 1201.
  4. d. Bought computers and copy machines from Ferber Equipment, $15,700, paying $4,000 in cash and placing the balance on account, Ck. No. 1202.
  5. e. Bought supplies on account from Wiggins’s Distributors, $535.
  6. f. Sold services for cash, $1,742.
  7. g. Bought insurance for one year, $1,375, Ck. No. 1203.
  8. h. Paid on account to Ferber Equipment, $700, Ck. No. 1204.
  9. i. Received and paid the electric bill, $438, Ck. No. 1205.
  10. j. Paid on account to Wiggins’s Distributors, $315, Ck. No. 1206.
  11. k. Sold services to customers for cash for the second half of the month, $820.
  12. l. Received and paid the bill for the business license, $75, Ck. No. 1207.
  13. m. Paid wages to an employee, $1,200, Ck. No. 1208.
  14. n. Resser withdrew cash for personal use, $700, Ck. No. 1209.

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 July 31, 20--.
  6. 6. Prepare an income statement for July 31, 20--.
  7. 7. Prepare a statement of owner’s equity for July 31, 20--.
  8. 8. Prepare a balance sheet as of July 31, 20--. LO 1, 2, 3, 4, 5, 6

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 July 31.

6.

To determine

Prepare an income statement for July 31.

7.

To determine

Prepare a statement of owners’ equity for July 31.

8.

To determine

Prepare a balance sheet as of July 31.

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