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On July 1, K. Resser opened Resser’s Business Services. Resser’s accountant listed the following chart of accounts: The following transactions were completed during July: a. Resser deposited $25,000 in a bank account in the name of the business. b. Bought tables and chairs for cash, $725, Ck. No. 1200. c. Paid the rent for the current month, $1,750, Ck. No. 1201. 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. e. Bought supplies on account from Wiggins’s Distributors, $535. f. Sold services for cash, $1,742. g. Bought insurance for one year, $1,375, Ck. No. 1203. h. Paid on account to Ferber Equipment, $700, Ck. No. 1204. i. Received and paid the electric bill, $438, Ck. No. 1205. j. Paid on account to Wiggins’s Distributors, $315, Ck. No. 1206. k. Sold services to customers for cash for the second half of the month, $820. l. Received and paid the bill for the business license, $75, Ck. No. 1207. m. Paid wages to an employee, $1,200, Ck. No. 1208. n. Resser withdrew cash for personal use, $700, Ck. No. 1209. 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 July 31, 20--. 6. Prepare an income statement for July 31, 20--. 7. Prepare a statement of owner’s equity for July 31, 20--. 8. Prepare a balance sheet as of July 31, 20--. LO 1, 2, 3, 4, 5, 6

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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 4PB
Textbook Problem

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

Chapter 2, Problem 4PB, On July 1, K. Resser opened Ressers Business Services. Ressers accountant listed the following chart

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

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