Managerial Accounting (Looseleaf)
7th Edition
ISBN: 9781260482935
Author: Wild
Publisher: MCG
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Chapter D, Problem 3PSB
To determine
Concept introduction:
General Entries:
General entries are the primary records of business transactions. As we know that every business transaction need to be recorded in the books of account, but this recording starts with recording in general journal and recording in general journal is done through
Hence, we can say that in the general entries every transaction is recorded primarily by debiting one side and by crediting other side of the business transaction.
Requirement 1:
General journal entries to record transactions.
Expert Solution
Answer to Problem 3PSB
| General Journal | ||||
| Date | Accounts Title & Explanation | PR | Debit | Credit |
| Nov. 1 | Cash | 101 | $30,000 | |
| Office Equipment | 163 | $15,000 | ||
| Common stock | 307 | $45,000 | ||
| (For recording investment of cash and office equipment in the company in exchange of common stock) | ||||
| Nov. 2 | Prepaid Rent | 131 | $4,500 | |
| Cash | 101 | $4,500 | ||
| (For recording payment of rent for 12 months) | ||||
| Nov. 4 | Office Equipment | 163 | $2,500 | |
| Office Supplies | 124 | $600 | ||
| Accounts Payable | 201 | $3,100 | ||
| (For recording credit purchase of office equipment and office supplies) | ||||
| Nov. 8 | Cash | 101 | $3,400 | |
| Service Revenue | 403 | $3,400 | ||
| (For recording service revenue) | ||||
| Nov. 12 | 106 | $10,200 | ||
| Service Revenue | 403 | $10,200 | ||
| (For recording completed services) | ||||
| Nov. 13 | Accounts Payable | 201 | $3,100 | |
| Cash | 101 | $3,100 | ||
| (For recording payment to accounts receivable) | ||||
| Nov. 19 | Prepaid Insurance | 128 | $1,800 | |
| Cash | 101 | $1,800 | ||
| (For recording prepaid insurance payment) | ||||
| Nov. 22 | Cash | 101 | $5,200 | |
| Accounts Receivable | 106 | $5,200 | ||
| (For recording receipt of cash from the accounts receivable) | ||||
| Nov. 24 | Accounts Receivable | 106 | $1,750 | |
| Service Revenue | 403 | $1,750 | ||
| (For recording completed services on credit) | ||||
| Nov. 28 | Dividends | 319 | $5,300 | |
| Cash | 101 | $5,300 | ||
| (For recording payment of cash dividends) | ||||
| Nov. 29 | Office Supplies | 124 | $249 | |
| Accounts Payable | 201 | $249 | ||
| (For recording office supplies on credit) | ||||
| Nov. 30 | Utilities Expense | 690 | $831 | |
| Cash | 101 | $831 | ||
| (For recording payment of utility bill) | ||||
Explanation of Solution
| General Journal | ||||
| Date | Accounts Title & Explanation | PR | Debit | Credit |
| Nov. 1 | Cash | 101 | $30,000 | |
| Office Equipment | 163 | $15,000 | ||
| Common stock | 307 | $45,000 | ||
| (For recording investment of cash and office equipment in the company in exchange of common stock) | ||||
| Nov. 2 | Prepaid Rent | 131 | $4,500 | |
| Cash | 101 | $4,500 | ||
| (For recording payment of rent for 12 months) | ||||
| Nov. 4 | Office Equipment | 163 | $2,500 | |
| Office Supplies | 124 | $600 | ||
| Accounts Payable | 201 | $3,100 | ||
| (For recording credit purchase of office equipment and office supplies) | ||||
| Nov. 8 | Cash | 101 | $3,400 | |
| Service Revenue | 403 | $3,400 | ||
| (For recording service revenue) | ||||
| Nov. 12 | Accounts Receivable | 106 | $10,200 | |
| Service Revenue | 403 | $10,200 | ||
| (For recording completed services) | ||||
| Nov. 13 | Accounts Payable | 201 | $3,100 | |
| Cash | 101 | $3,100 | ||
| (For recording payment to accounts receivable) | ||||
| Nov. 19 | Prepaid Insurance | 128 | $1,800 | |
| Cash | 101 | $1,800 | ||
| (For recording prepaid insurance payment) | ||||
| Nov. 22 | Cash | 101 | $5,200 | |
| Accounts Receivable | 106 | $5,200 | ||
| (For recording receipt of cash from the accounts receivable) | ||||
| Nov. 24 | Accounts Receivable | 106 | $1,750 | |
| Service Revenue | 403 | $1,750 | ||
| (For recording completed services on credit) | ||||
| Nov. 28 | Dividends | 319 | $5,300 | |
| Cash | 101 | $5,300 | ||
| (For recording payment of cash dividends) | ||||
| Nov. 29 | Office Supplies | 124 | $249 | |
| Accounts Payable | 201 | $249 | ||
| (For recording office supplies on credit) | ||||
| Nov. 30 | Utilities Expense | 690 | $831 | |
| Cash | 101 | $831 | ||
| (For recording payment of utility bill) | ||||
1. When investment is made in exchange of common stock, then cash account and office equipment account will be debited and common stock account will be credited because at the time of receipt, cash account and office equipment account need to be debited. Common stock is credited because it is a liability and liability need to be credited.
2. Prepaid rent is treated as asset that is why prepaid rent account is debited while cash account will be credited because cash is gone out from business.
3. Office equipment and office supplies both are assets that is why at the time of purchase these accounts will be debited while accounts payable account will be credited because it is a liability.
4. At the time of receipt, cash account will be debited because cash comes in to business while service revenue account will be credited because revenues need to be credited.
5. When services are performed on credit then accounts receivable account is debited and service revenue account is credited.
6. At the time of payment to accounts payable, accounts payable account will be debited because liability is decreased while cash account will be credited because cash is gone out the business.
7. When insurance premium is paid for next 12 months then prepaid insurance account will be debited because it is an asset account while cash account will be credited because cash is gone out from the business.
8. At the time of cash receipt from accounts receivable, cash account is debited because cash comes in to the business while accounts receivable account is credited because balance of account receivable is decreased.
9. When dividend is paid then dividend account will be debited because it is an expense while cash account will be credited because cash is gone out from business.
10. When utility bill is paid then utilities expense account will be debited because it is an expense while cash account will be credited because cash is gone out from the business.
To determine
Concept introduction:
General Entries:
General entries are the primary records of business transactions. As we know that every business transaction need to be recorded in the books of account, but this recording starts with recording in general journal and recording in general journal is done through journal entries.
Hence, we can say that in the general entries every transaction is recorded primarily by debiting one side and by crediting other side of the business transaction.
Requirement 2:
Ledger accounts.
Expert Solution
Answer to Problem 3PSB
| Cash Account No. 101 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $30,000 | $30,000 | |
| Nov. 2 | G1 | $4,500 | $25,500 | |
| Nov. 8 | G1 | $3,400 | $28,900 | |
| Nov. 13 | G1 | $3,100 | $25,800 | |
| Nov. 19 | G1 | $1,800 | $24,000 | |
| Nov. 22 | G1 | $5,200 | $29,200 | |
| Nov. 28 | G1 | $5,300 | $23,900 | |
| Nov. 30 | G1 | $831 | $23,069 | |
| Accounts Receivable Account No. 106 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 12 | G1 | $10,200 | $10,200 | |
| Nov. 22 | G1 | $5,200 | $5,000 | |
| Nov. 24 | G1 | $1,750 | $6,750 | |
| Office Supplies Account No. 124 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 4 | G1 | $600 | $600 | |
| Nov. 29 | G1 | $249 | $849 | |
| Prepaid Insurance Account No. 128 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 19 | G1 | $1,800 | $1,800 | |
| Prepaid Rent Account No. 131 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 2 | G1 | $4,500 | $4,500 | |
| Office Equipment Account No. 163 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $15,000 | $15,000 | |
| Nov. 4 | G1 | $2,500 | $17,500 | |
| Accounts Payable Account No. 201 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 4 | G1 | $3,100 | $3,100 | |
| Nov. 13 | G1 | $3,100 | $0 | |
| Nov. 29 | G1 | $249 | $249 | |
| Common Stock Account No. 307 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $45,000 | $45,000 | |
| Dividends Account No. 319 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 28 | G1 | $5,300 | $5,300 | |
| Service Revenue Account No. 403 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 8 | G1 | $3,400 | $3,400 | |
| Nov. 12 | G1 | $10,200 | $13,600 | |
| Nov. 24 | G1 | $1,750 | $15,350 | |
| Utilities Expense Account No. 690 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 30 | G1 | $831 | $831 | |
Explanation of Solution
| Cash Account No. 101 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $30,000 | $30,000 | |
| Nov. 2 | G1 | $4,500 | $25,500 | |
| Nov. 8 | G1 | $3,400 | $28,900 | |
| Nov. 13 | G1 | $3,100 | $25,800 | |
| Nov. 19 | G1 | $1,800 | $24,000 | |
| Nov. 22 | G1 | $5,200 | $29,200 | |
| Nov. 28 | G1 | $5,300 | $23,900 | |
| Nov. 30 | G1 | $831 | $23,069 | |
As we know that in case of cash account debit side increase the ending balance while credit side decrease the ending balance.
| Accounts Receivable Account No. 106 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 12 | G1 | $10,200 | $10,200 | |
| Nov. 22 | G1 | $5,200 | $5,000 | |
| Nov. 24 | G1 | $1,750 | $6,750 | |
As we know that in case of accounts receivable account debit side increase the ending balance while credit side decrease the ending balance of this account.
| Office Supplies Account No. 124 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 4 | G1 | $600 | $600 | |
| Nov. 29 | G1 | $249 | $849 | |
As we know that in case of office supplies account debit side increase the ending balance while credit side decrease the ending balance of this account.
| Prepaid Insurance Account No. 128 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 19 | G1 | $1,800 | $1,800 | |
As we know that in case of prepaid insurance account debit side increase the ending balance while credit side decrease the ending balance of this account.
| Prepaid Rent Account No. 131 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 2 | G1 | $4,500 | $4,500 | |
As we know that in case of prepaid rent account debit side increase the ending balance while credit side decrease the ending balance of this account.
| Office Equipment Account No. 163 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $15,000 | $15,000 | |
| Nov. 4 | G1 | $2,500 | $17,500 | |
As we know that in case of office equipment account debit side increase the ending balance while credit side decrease the ending balance of this account.
| Accounts Payable Account No. 201 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 4 | G1 | $3,100 | $3,100 | |
| Nov. 13 | G1 | $3,100 | $0 | |
| Nov. 29 | G1 | $249 | $249 | |
As we know that in case of accounts payable account credit side increase the ending balance while debit side decrease the ending balance of this account.
| Common Stock Account No. 307 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 1 | G1 | $45,000 | $45,000 | |
As we know that in case of common stock account credit side increase the ending balance while debit side decrease the ending balance of this account.
| Dividends Account No. 319 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 28 | G1 | $5,300 | $5,300 | |
As we know that in case of dividend account debit side increase the ending balance while credit side decrease the ending balance of this account because it is an expense.
| Service Revenue Account No. 403 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 8 | G1 | $3,400 | $3,400 | |
| Nov. 12 | G1 | $10,200 | $13,600 | |
| Nov. 24 | G1 | $1,750 | $15,350 | |
As we know that in case of service account credit side increase the ending balance while debit side decrease the ending balance of this account.
| Utilities Expense Account No. 690 | ||||
| Date | PR | Debit | Credit | Balance |
| Nov. 30 | G1 | $831 | $831 | |
As we know that in case of utilities expense account debit side increase the ending balance while credit side decrease the ending balance of this account because it is an expense.
To determine
Concept introduction:
General Entries:
General entries are the primary records of business transactions. As we know that every business transaction need to be recorded in the books of account, but this recording starts with recording in general journal and recording in general journal is done through journal entries.
Hence, we can say that in the general entries every transaction is recorded primarily by debiting one side and by crediting other side of the business transaction.
Requirement 3:
The
Expert Solution
Answer to Problem 3PSB
| Trial Balance | ||
| As on November 30 | ||
| Debit | Credit | |
| Cash | $23,069 | |
| Accounts receivable | $6,750 | |
| Office supplies | $849 | |
| Prepaid insurance | $1,800 | |
| Prepaid rent | $4,500 | |
| Office equipment | $17,500 | |
| Accounts payable | $249 | |
| Common stock | $45,000 | |
| Dividends | $5,300 | |
| Service revenue | $15,350 | |
| Utilities expense | $831 | |
| Totals | $60,599 | $60,599 |
Explanation of Solution
1. All expenses and losses have debit balance, that is why these are shown in the debit column of the trial balance.
2. All revenues and gains have credit balance, that is why these are shown in the credit column of the trial balance.
3. All assets have debit balance, that is why these are shown in the debit column of the trial balance.
4. Liabilities and equity have credit balance, that is why these are shown in the credit column of the trial balance.
| Trial Balance | ||
| As on November 30 | ||
| Debit | Credit | |
| Cash | $23,069 | |
| Accounts receivable | $6,750 | |
| Office supplies | $849 | |
| Prepaid insurance | $1,800 | |
| Prepaid rent | $4,500 | |
| Office equipment | $17,500 | |
| Accounts payable | $249 | |
| Common stock | $45,000 | |
| Dividends | $5,300 | |
| Service revenue | $15,350 | |
| Utilities expense | $831 | |
| Totals | $60,599 | $60,599 |
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Chapter D Solutions
Managerial Accounting (Looseleaf)
Ch. D - Prob. 1DQCh. D - Prob. 2DQCh. D - Prob. 3DQCh. D - Prob. 4DQCh. D - Are debits or credits typically listed first in...Ch. D - Should a transaction be recorded first in a...Ch. D - Prob. 7DQCh. D - Why does the reeordkeeper prepare a trial balance?Ch. D - Prob. 9DQCh. D - Prob. 10DQ
Ch. D - Prob. 11DQCh. D - Prob. 12DQCh. D - Prob. 13DQCh. D - Define (a) assets, (b) liabilities, and (c) equityCh. D - Prob. 15DQCh. D - Review the Apple balance sheet Appendix A....Ch. D - Review the Google balance sheet in Appendix A....Ch. D - Prob. 18DQCh. D - Identify the items from the following list that...Ch. D - Prob. 2QSCh. D - Prob. 3QSCh. D - Identify the normal balance (debit or credit) for...Ch. D - Prob. 5QSCh. D - Prob. 6QSCh. D - Prob. 7QSCh. D - A trial balance has total debits of $20,000 and...Ch. D - Prob. 9QSCh. D - Prob. 10QSCh. D - Prob. 11QSCh. D - Prob. 12QSCh. D - Prob. 13QSCh. D - Prob. 14QSCh. D - Prob. 15QSCh. D - Order the following steps in the accounting...Ch. D - Prob. 2ECh. D - Enter the number for the item that best completes...Ch. D - For each of the following, (1) identify the type...Ch. D - Prob. 5ECh. D - Prob. 6ECh. D - Prepare general journal entries for the following...Ch. D - Prob. 8ECh. D - Prob. 9ECh. D - Prob. 10ECh. D - Prob. 11ECh. D - 1. Prepare general journal entries for the...Ch. D - Prob. 13ECh. D - Prob. 14ECh. D - A corporation had the following assets and...Ch. D - Carmen Camry operates a consulting firm called...Ch. D - Prob. 17ECh. D - Prob. 18ECh. D - Prob. 19ECh. D - Prob. 20ECh. D - You are told the column totals in a trial balance...Ch. D - Exercise D-22 Calculating and interprets the debt...Ch. D - Prob. 23ECh. D - Prob. 1PSACh. D - Prob. 2PSACh. D - Denzel Brooks opened a web consulting business...Ch. D - Prob. 4PSACh. D - The accounting records of Nettle Distribution show...Ch. D - Prob. 6PSACh. D - Prob. 7PSACh. D - Prob. 1PSBCh. D - Prob. 2PSBCh. D - Prob. 3PSBCh. D - Prob. 4PSBCh. D - Prob. 5PSBCh. D - Prob. 6PSBCh. D - Prob. 7PSBCh. D - Prob. 1SPCh. D - Prob. 2SPCh. D - Prob. 3SPCh. D - Prob. 1GLPCh. D - Prob. 2GLPCh. D - Prob. 3GLPCh. D - Prob. 4GLPCh. D - Prob. 5GLPCh. D - Prob. 6GLPCh. D - Prob. 7GLPCh. D - Using transactions from the following assignments...Ch. D - Prob. 1AACh. D - Prob. 2AACh. D - Prob. 3AACh. D - Prob. 1BTNCh. D - Prob. 2BTNCh. D - Prob. 3BTNCh. D - The expanded accounting equation consists of...Ch. D - Prob. 5BTNCh. D - Prob. 6BTNCh. D - Prob. 7BTN
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- In March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow. a. Carter deposited 25,000 in a bank account in the name of the business. b. Bought a used truck from Degroot Motors for 15,140, paying 5,140 in cash and placing the remainder on account. c. Bought equipment on account from Flemming Company, 3,450. d. Paid the rent for the month, 1,000, Ck. No. 3001. e. Sold services for cash for the first half of the month, 6,927. f. Bought supplies for cash, 301, Ck. No. 3002. g. Bought insurance for the truck for the year, 1,200, Ck. No. 3003. h. Received and paid the bill for utilities, 349, Ck. No. 3004. i. Received a bill for gas and oil for the truck, 218. j. Sold services on account, 3,603. k. Sold services for cash for the remainder of the month, 4,612. l. Paid wages to the employees, 3,958, Ck. Nos. 30053007. m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. 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.arrow_forwardIn March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow. a. Carter deposited 25,000 in a bank account in the name of the business. b. Bought a used truck from Degroot Motors for 15,140, paying 5,140 in cash and placing the remainder on account. c. Bought equipment on account from Flemming Company, 3,450. d. Paid the rent for the month, 1,000, Ck. No. 3001 (Rent Expense). e. Sold services for cash for the first half of the month, 6,927 (Service Income). f. Bought supplies for cash, 301, Ck. No. 3002. g. Bought insurance for the truck for the year, 1,200, Ck. No. 3003. h. Received and paid the bill for utilities, 349, Ck. No. 3004 (Utilities Expense). i. Received a bill for gas and oil for the truck, 218 (Gas and Oil Expense). j. Sold services on account, 3,603 (Service Income). k. Sold services for cash for the remainder of the month, 4,612 (Service Income). l. Paid wages to the employees, 3,958, Ck. Nos. 30053007 (Wages Expense). m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardA business has the following transactions: The business is started by receiving cash from an investor in exchange for common stock $20,000 The business purchases supplies on account $500 The business purchases furniture on account $2,000 The business renders services to various clients on account totaling $9,000 The business pays salaries $2,000 The business pays this months rent $3,000 The business pays for the supplies purchased on account. The business collects from one of its clients for services rendered earlier in the month $1,500. What is total income for the month?arrow_forward
- 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 Luigis Equipment, 3,795. d. Paid the rent for the month, 1,255, Ck. No. 501 (Rent Expense). 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 (Catering Income). g. Bought supplies for cash, 185, Ck. No. 503. h. Sold catering services on account, 4,307 (Catering Income). i. Received and paid the heating bill, 248, Ck. No. 504 (Utilities Expense). j. Received a bill from GC Gas and Lube for gas and oil for the truck, 128 (Gas and Oil Expense). k. Sold catering services for cash for the remainder of the month, 2,649 (Catering Income). l. Gervais withdrew cash for personal use, 1,550, Ck. No. 505. m. Paid the salary of the assistant, 1,150, Ck. No. 506 (Salary Expense). Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardOn July 1, K. Resser opened Ressers Business Services. Ressers 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 Wigginss 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 Wigginss 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 owners 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 owners equity for July 31, 20--. 8. Prepare a balance sheet as of July 31, 20--. LO 1, 2, 3, 4, 5, 6arrow_forwardP. Schwartz, Attorney at Law, opened his office on October 1. The account headings are presented below. Transactions completed during the month follow. a. Schwartz deposited 25,000 in a bank account in the name of the business. b. Bought office equipment on account from QuipCo, 9,670. c. Schwartz invested his personal law library, which cost 2,800. d. Paid the office rent for the month, 1,700, Ck. No. 2000. e. Bought office supplies for cash, 418, Ck. No. 2001. f. Bought insurance for two years, 944, Ck. No. 2002. g. Sold legal services for cash, 8,518. h. Paid the salary of the part-time receptionist, 1,820, Ck. No. 2003. i. Received and paid the telephone bill, 388, Ck. No. 2004. j. Received and paid the bill for utilities, 368, Ck. No. 2005. k. Sold legal services for cash, 9,260. l. Paid on account to QuipCo, 2,670, Ck. No. 2006. m. Schwartz withdrew cash for personal use, 2,500, Ck. No. 2007. 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.arrow_forward
- The following information is provided for the first month of operations for Legal Services Inc.: A. The business was started by selling $100,000 worth of common stock. B. Six months rent was paid in advance, $4,500. C. Provided services in the amount of $1,000. The customer will pay at a later date. D. An office worker was hired. The worker will be paid $275 per week. E. Received $500 in payment from the customer in C. F. Purchased $250 worth of supplies on credit. G. Received the electricity bill. We will pay the $110 in thirty days. H. Paid the worker hired in D for one weeks work. I. Received $100 from a customer for services we will provide next week. J. Dividends in the amount of $1,500 were distributed. Prepare the necessary journal entries to record these transactions. If an entry is not required for any of these transactions, state this and explain why.arrow_forwardA business has the following transactions: A. The business is started by receiving cash from an investor in exchange for common stock $10,000. B. Rent of $1,250 is paid for the first month. C. Office supplies are purchased for $375. D. Services worth $3,450 are performed. Cash is received for half. E. Customers pay $1,250 for services to be performed next month. F. $6,000 is paid for a one year insurance policy. G. We receive 25% of the money owed by customers in D. H. A customer has placed an order for $475 of services to be done this coming week. How much total revenue does the company have?arrow_forwardIn July of this year, M. Wallace established a business called Wallace Realty. The account headings are presented below. Transactions completed during the month follow. a. Wallace deposited 24,000 in a bank account in the name of the business. b. Paid the office rent for the current month, 650, Ck. No. 1000. c. Bought office supplies for cash, 375, Ck. No. 1001. d. Bought office equipment on account from Dellos Computers, 6,300. e. Received a bill from the City Crier for advertising, 455. f. Sold services for cash, 3,944. g. Paid on account to Dellos Computers, 1,500, Ck. No. 1002. h. Received and paid the bill for utilities, 340, Ck. No. 1003. i. Paid on account to the City Crier, 455, Ck. No. 1004. j. Paid truck expenses, 435, Ck. No. 1005. k. Wallace withdrew cash for personal use, 1,500, Ck. No. 1006. 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.arrow_forward
- During February of this year, H. Rose established Rose Shoe Hospital. The following asset, liability, and owners equity accounts are included in the chart of accounts: The following transactions occurred during the month of February: a. Rose deposited 25,000 cash in a bank account in the name of the business. b. Bought shop equipment for cash, 1,525, Ck. No. 1000. c. Bought advertising on account from Milland Company, 325. d. Bought store shelving on account from Inger Hardware, 750. e. Bought office equipment from Sharas Office Supply, 625, paying 225 in cash and placing the balance on account, Ck. No. 1001. f. Paid on account to Inger Hardware, 750, Ck. No. 1002. g. Rose invested his personal leather working tools with a fair market value of 800 in the business h. Sold services for the month of February for cash, 250. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts. 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.arrow_forwardB. Kelso established Computer Wizards during November of this year. The accountant prepared the following chart of accounts: The following transactions occurred during the month: a. Kelso deposited 45,000 in a bank account in the name of the business. b. Paid the rent for the current month, 1,800, Ck. No. 2001. c. Bought office desks and filing cabinets for cash, 790, Ck. No. 2002. d. Bought a computer and printer from Cyber Center for use in the business, 2,700, paying 1,700 in cash and placing the balance on account, Ck. No. 2003. e. Bought a neon sign on account from Signage Co., 1,350. f. Kelso invested her personal computer software with a fair market value of 600 in the business. g. Received a bill from Country News for newspaper advertising, 365. h. Sold services for cash, 1,245. i. Received and paid the electric bill, 345, Ck. No. 2004. j. Paid on account to Country News, a creditor, 285, Ck. No. 2005. k. Sold services for cash, 1,450. l. Paid wages to an employee, 925, Ck. No. 2006. m. Received and paid the bill for the city business license, 75, Ck. No. 2007. n. Kelso withdrew cash for personal use, 850, Ck. No. 2008. o. Kelso withdrew cash for personal use, 850, Ck. No. 2008. Required 1. Record the owners 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 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, with a three-line heading, dated November 30, 20--.arrow_forwardDuring December of this year, G. Elden established Ginnys Gym. The following asset, liability, and owners equity accounts are included in the chart of accounts: During December, the following transactions occurred: a. Elden deposited 35,000 in a bank account in the name of the business. b. Bought exercise equipment for cash, 8,150, Ck. No. 1001. c. Bought advertising on account from Hazel Company, 105. d. Bought a display rack on account from Cyber Core, 790. e. Bought office equipment on account from Office Aids, 185. f. Elden invested her exercise equipment with a fair market value of 1,200 in the business. g. Made a payment to Cyber Core, 200, Ck. No. 1002. h. Sold services for the month of December for cash, 800. Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.arrow_forward
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