Following are the transactions of Sustain Company. June 1 T. James, owner, invested $18,500 cash in Sustain Company in exchange for common stock. June 2 The company purchased $11,500 of furniture made from reclaimed wood on credit. June 3 The company paid $2,100 cash for a 12-month prepaid insurance policy on the reclaimed furniture. June 4 The company billed a customer $10,500 for sustainability services provided. June 12 The company paid $11,500 cash toward the payable from the June 2 furniture purchase. June 20 The company collected $10,500 cash for services billed on June 4. June 21 T. James invested an additional $17,500 cash in Sustain Company in exchange for common stock. June 30 The company received $12,500 cash in advance of providing sustainability services to a customer. Prepare general journal entries for the above transactions.

Following are the transactions of Sustain Company. June 1 T. James, owner, invested $18,500 cash in Sustain Company in exchange for common stock. June 2 The company purchased $11,500 of furniture made from reclaimed wood on credit. June 3 The company paid $2,100 cash for a 12-month prepaid insurance policy on the reclaimed furniture. June 4 The company billed a customer $10,500 for sustainability services provided. June 12 The company paid $11,500 cash toward the payable from the June 2 furniture purchase. June 20 The company collected $10,500 cash for services billed on June 4. June 21 T. James invested an additional $17,500 cash in Sustain Company in exchange for common stock. June 30 The company received $12,500 cash in advance of providing sustainability services to a customer. Prepare general journal entries for the above transactions.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 12PA: Sewn for You had the following transactions in its first week of business. A. Jessica Johansen...

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Discuss how each of the following transactions will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. A company purchased $450 worth of office supplies on credit. B. The company parking lot was plowed after a blizzard. A check for $75 was given to the plow truck operator. C. $250 was paid on account. D. A customer paid $350 on account. E. Provided services for a customer, $500. The customer asked to be billed.
During 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.
For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.
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.
In 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.
Sewn for You had the following transactions in its first week of business. A. Jessica Johansen started Sewn for You, a seamstress business, by contributing $20,000 and receiving stock in exchange. B. Paid $2,250 to cover the first three months rent. C. Purchased $500 of sewing supplies. She paid cash for the purchase. D. Purchased a sewing machine for $1,500 paying $200 cash and signing a note for the balance. E. Finished a job for a customer earning $180. The customer paid cash. F. Received a $500 down payment to make a wedding dress. G. Received an electric bill for $125 which is due to be paid in three weeks. H. Completed an altering job for $45. The customer asked to be billed. 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.
Transaction Analysis and Financial Statements Just Rolling Along Inc. was organized on May 1 by two college students who recognized an opportunity to make money while spending their days at a beach along Lake Michigan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations: May 1: Received contribution of $9,000 from each of the two principal owners of the new business in exchange for shares of stock. May 1: Purchased ten bicycles for $300 each on an open account. The company has 30 days to pay for the bicycles. May 5: Registered as a vendor with the city and paid the $15 monthly fee. May 9: Purchased 20 pairs of in-line skates at $125 per pair, 20 helmets at $50 each, and 20 sets of protective gear (knee and elbow pads and wrist guards) at $45 per set for cash. May 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies. May 15: Paid $125 bill from local radio station for advertising for the last two weeks of May. May 17: Customers rented in-line skates and bicycles for cash of $1,800. May 24: Billed the local park district $1,200 for in-line skating lessons provided to neighborhood children. The park district is to pay one-half of the bill within five working days and the rest within 30 days. May 29: Received 50% of the amount billed to the park district. May 30: Customers rented in-line skates and bicycles for cash of $3,000. May 30: Paid wages of $160 to a friend who helped over the weekend. May 31: Paid the balance due on the bicycles. Required Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with the date. Prepare an income statement for the month of May. Prepare a classified balance sheet at May 31. Why do you think the two college students decided to incorporate their business rather than operate it as a partnership?
A 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?
Journal Entries and a Balance Sheet Krittersbegone Inc. was organized on July 1 by a group of technicians to provide termite inspections and treatment to homeowners and small businesses. The following transactions occurred during the first month of business: July 2: Received contributions of $3,000 from each of the six owners in exchange for shares of stock. July 3: Paid $1,000 rent for the month of July. July 5: Purchased flashlights, tools, spray equipment, and ladders for $18,000, with a down payment of $5,000 and the balance due in 30 days. July 17: Paid a $200 bill for the distribution of door-to-door advertising. July 28: Paid August rent and July utilities to the landlord in the amounts of $1,000 and $450, respectively. July 30: Received $8,000 in cash from homeowners for services performed during the month. In addition, billed $7,500 to other customers for services performed during the month. Billings are due in 30 days. July 30: Paid commissions of $9,500 to the technicians for July. Required Prepare journal entries on the books of Krittersbegone to record the transactions entered into during the month. Ignore depreciation expense. Prepare a classified balance sheet dated July 31. From the balance sheet, what cash inflow and what cash outflow can you predict in the month of August? Who would be interested in the cash flow information? Why?
B. 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--.
Following are the transactions of Sustain Company. June 1 T. James, owner, invested $15,500 cash in Sustain Company in exchange for common stock. June 2 The company purchased $8,500 of furniture made from reclaimed wood on credit. June 3 The company paid $1,500 cash for a 12-month prepaid insurance policy on the reclaimed furniture. June 4 The company billed a customer $7,500 for sustainability services provided. June 12 The company paid $8,500 cash toward the payable from the June 2 furniture purchase. June 20 The company collected $7,500 cash for services billed on June 4. June 21 T. James invested an additional $14,500 cash in Sustain Company in exchange for common stock. June 30 The company received $9,500 cash in advance of providing sustainability services to a customer. Prepare general journal entries for the above transactions.
Following are the transactions of Sustain Company. June 1 T. James, owner, invested $12,500 cash in Sustain Company. June 2 The company purchased $5,500 of furniture made from reclaimed wood on credit. June 3 The company paid $900 cash for a 12-month prepaid insurance policy on the reclaimed furniture. June 4 The company billed a customer $4,500 for sustainability services provided. June 12 The company paid $5,500 cash toward the payable from the June 2 furniture purchase. June 20 The company collected $4,500 cash for services billed on June 4. June 21 T. James invested an additional $11,500 cash in Sustain Company. June 30 The company received $6,500 cash in advance of providing sustainability services to a customer. Prepare general journal entries for the above transactions.