(a)
Journal:
Journal is the systematic method of recording the business transactions in a chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system of accounting.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To journalize: The transaction as given in the book of Company KWW for the month of July.
(a)
Explanation of Solution
The
Date | Account Title | Post ref. | Debit ($) | Credit ($) |
July 1 | Cash | 12,000 | ||
Common Stock | 12,000 | |||
(To record the issue of common stock) | ||||
July 1 | Equipment | 8,000 | ||
Accounts Payable | 6,000 | |||
Cash | 2,000 | |||
(To record the purchase of equipment making part payment and balance on credit) | ||||
July 3 | Supplies | 900 | ||
Accounts Payable | 900 | |||
(To record cleaning supplies purchased on account) | ||||
July 5 | Prepaid Insurance | 1,800 | ||
Cash | 1,800 | |||
(To record the payment of insurance premium) | ||||
July 12 | Accounts Receivable | 3,700 | ||
Service Revenue | 3,700 | |||
(To record the services performed to customers on credit) | ||||
July 18 | Accounts Payable | 1,500 | ||
Cash | 1,500 | |||
(To record payment of cash owed on truck and cleaning supplies) | ||||
July 20 | Salaries and Wages Expense | 2,000 | ||
Cash | 2,000 | |||
(To record payment of salaries) | ||||
July 21 | Cash | 1,600 | ||
Accounts Receivable | 1,600 | |||
(To record cash received from customer for service provided on July 12th for credit) | ||||
July 25 | Accounts Receivable | 2,500 | ||
Service Revenue | 2,500 | |||
(To record services performed to customers on credit) | ||||
July 31 | Maintenance and Repairs Expense | 290 | ||
Cash | 290 | |||
(To record payment made for maintenance of truck) | ||||
July 31 | Dividends | 600 | ||
Cash | 600 | |||
(To record distribution of dividend) |
Table (1)
(b)
T-account:
T-account refers to an individual account, which records the increases or decreases in the value of specific asset, liability, stockholder’s equity, revenue, and expenditure.
This account is referred to as the T-account, because of the alignment, of the components of the account resembles the capital letter ‘T’. This account consists of the three main components which are as follows:
- (a) The title of the account
- (b) The left or debit side
- (c) The right or credit side
To post: The journal transactions to T-account of Company KWW for the month of July.
(b)
Explanation of Solution
Post the transactions to T-account of Company KWW as follows:
Cash | ||||||||||||||||||||||
1-Jul | $12,000 | 7/1 | $2,000 | |||||||||||||||||||
21-Jul | $1,600 | 7/5 | $1,800 | |||||||||||||||||||
7/18 | $1,500 | |||||||||||||||||||||
7/20 | $2,000 | |||||||||||||||||||||
7/31 | $290 | |||||||||||||||||||||
7/31 | $600 | |||||||||||||||||||||
31-Jul | Bal. | $5,410 | ||||||||||||||||||||
Accounts Receivable | ||||||||||||||||||||||
12-Jul | $3,700 | 7/21 | $1,600 | |||||||||||||||||||
25-Jul | $2,500 | |||||||||||||||||||||
31-Jul | $1,700 | |||||||||||||||||||||
31-Jul | Bal. | $6,300 | ||||||||||||||||||||
Supplies | ||||||||||||||||||||||
3-Jul | $900 | 7/31 | $580 | |||||||||||||||||||
31-Jul | Bal. | $320 | ||||||||||||||||||||
Prepaid Insurance | ||||||||||||||||||||||
5-Jul | $1,800 | 7/31 | $150 | |||||||||||||||||||
31-Jul | Bal. | $1,650 | ||||||||||||||||||||
Equipment | ||||||||||||||||||||||
1-Jul | $8,000 | |||||||||||||||||||||
31-Jul | Bal. | $8,000 | ||||||||||||||||||||
Accounts Payable | ||||||||||||||||||||||
18-Jul | $1,500 | 7/1 | $6,000 | |||||||||||||||||||
7/3 | $900 | |||||||||||||||||||||
7/31 | Bal. | $5,400 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
7/1 | $12,000 | |||||||||||||||||||||
7/31 | Bal. | $12,000 | ||||||||||||||||||||
Maintenance and Repairs Expense | ||||||||||||||||||||||
31-Jul | $290 | 7/31 | $290 | |||||||||||||||||||
31-Jul | Bal. | 0 | ||||||||||||||||||||
Salaries and Wages Expense | ||||||||||||||||||||||
20-Jul | $2,000 | 7/31 | $2,400 | |||||||||||||||||||
31-Jul | $400 | |||||||||||||||||||||
31-Jul | Bal. | 0 | ||||||||||||||||||||
(c)
To prepare: The
(c)
Explanation of Solution
Trial balance of Company KWW on July 31, 2017, before adjustment is as follows:
Company KWW | ||
Trial Balance before Adjustments | ||
July 31, 2017 | ||
Particulars | Debit $ | Credit $ |
Cash | 5410 | |
Accounts Receivable | 4,600 | |
Supplies | 900 | |
Prepaid Insurance | 1,800 | |
Equipment | 8,000 | |
Accounts Payable | 5,400 | |
Common Stock | 12,000 | |
Dividends | 600 | |
Service Revenue | 6,200 | |
Maintenance and Repairs Expense | 290 | |
Salaries and Wages Expense | 2,000 | |
23,600 | 23,600 |
Table (2)
Thus, the total of debit, and credit columns of a trial balance is $23,600 and agreed.
(d)
Adjusting entries are the journal entries which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.
To journalize: The adjusting transactions as given in the books of Company KWW.
(d)
Explanation of Solution
The adjusting journal entries in the book of Company KWW at the end of the July month are as follows:
1. An adjusting entry for Accounts receivable:
In this case, Company KWW performed the service to customer in advance before the service. So, the necessary adjusting entry that the Company KWW should record for the unearned service revenue at end of the July month is as follows:
Date | Account Titles and Description | Debit ($) | Credit ($) |
July 31, 2017 | Accounts Receivable | 1700 | |
Service Revenue | 1700 | ||
(To record the unbilled services at end of the month) |
Table (3)
Description:
- Accounts Receivable is a liability, and it decreases the value of liability by $1700, hence debit the unearned accounts receivable for $1700.
- Service revenue increases the value of
stockholders’ equity by $1700; hence credit the service revenue for $1700.
2. An adjusting entry for
In this case, Company KWW recognized the depreciation expense on equipment at end of the July month. So, the necessary adjusting entry that the Company KWW should make to record the depreciation expense at end of the month is as follows:
Date | Account Titles and Description | Debit ($) | Credit ($) |
July 31, 2017 | Depreciation expense | 180 | |
| 180 | ||
(To record the depreciation expenses allocated at end of the month) |
Table (4)
Description:
- Depreciation expense decreases the value of stockholders’ equity by $180; hence debit the depreciation expense for $180.
- Accumulated depreciation is a contra asset account, and it decreases the value of asset by $180 hence, credit the accumulated depreciation for $180.
3. An adjusting entry for insurance expense:
In this case, Company KWW recognized the insurance expenses at the end of the July month. So, the necessary adjusting entry that the Company KWW should record to recognize the insurance expense is as follows:
Date | Account Titles and Description | Debit ($) | Credit ($) |
July 31, 2017 | Insurance expense | 150 | |
Prepaid insurance (1) | 150 | ||
(To record the insurance expenses expired at the end of July month) |
Table (5)
Description:
- Insurance expense decreases the value of stockholders’ equity by $150 hence debit the insurance expense for $150.
- Prepaid insurance is an asset, and it decreases the value of asset by $150, hence credit the prepaid insurance for $150.
Working Note:
Calculate the insurance expense.
4. An adjusting entry for Supplies expenses:
In this case, Company KWW recognized the supplies expenses at the end of the July month. So, the necessary adjusting entry that the Company KWW should record to recognize the supplies expense is as follows:
Date | Account Titles and Description | Debit ($) | Credit ($) |
July 31, 2017 | Supplies Expense | 580 | |
Supplies (2) | 580 | ||
(To record the supplies expenses incurred at the end of the July) |
Table (6)
Description:
- Supplies expense decreases the value of stockholders’ equity by $580; hence debit the supplies expenses for $580.
- Supplies are an asset, and it decreases the value of asset by $580, hence credit the supplies for $580.
Working note:
Calculate the value of supplies expense at end of the July month
5. An adjusting entry for salaries and wages payable:
In this case, Company KWW incurred the salaries and wages expense but cash is not yet paid. So, the necessary adjusting entry that the Company KWW should record to recognize the accrued expense is as follows:
Date | Account Title and Description |
Debit ($) |
Credit ($) |
July 31, 2017 | Salaries and wages expense | 400 | |
Salaries and wages payable | 400 | ||
(To record the salaries and wages expense incurred at the end of the month) |
Table (7)
Description:
- Salaries and wages expense decreases the value of stockholders’ equity by $400 hence, debit the salaries and wages expense for $400.
- Salaries and wages payable is a liability, and it increases the value of liability by $400, hence credit the salaries and wages payable for $400.
(e)
To post: The adjusting entries to T-account of Company KWW for the month of July.
(e)
Explanation of Solution
Accounts Receivable | |||||
12-Jul | $3,700 | 7/21 | $1,600 | ||
25-Jul | $2,500 | ||||
31-Jul | $1,700 | ||||
31-Jul | Bal. | $6,300 |
Accumulated Depreciation— Equipment | |||||
7/31 | 180 | ||||
7/31 | Bal. | $180 |
Prepaid Insurance | |||||
5-Jul | $1,800 | 7/31 | $150 | ||
31-Jul | Bal. | $1,650 |
Supplies Expense | ||||||
31-Jul | $580 | 7/31 | $580 | |||
31-Jul | Bal. | 0 | ||||
Salaries and Wages Payable | |||||
7/31 | 400 | ||||
7/31 | Bal. | $400 |
(f)
Adjusted trial balance:
Adjusted trial balance is a summary of all the ledger accounts, and it contains the balances of all the accounts after the adjustment entries are journalized, and posted.
To prepare: The trial balance of Company KWW on July 31, 2017 after adjustment.
(f)
Explanation of Solution
Trial balance of Company KWW on July 31, 2017, after adjustment is as follows:
Company KWW | ||
Trial Balance after Adjustments | ||
July 31, 2017 | ||
Particulars | Debit $ | Credit $ |
Cash | 5,410 | |
Accounts Receivable | 6,300 | |
Supplies | 320 | |
Prepaid Insurance | 1,650 | |
Equipment | 8,000 | |
Accumulated Depreciation - Equipment | 180 | |
Accounts Payable | 5,400 | |
Salaries and Wages Payable | 400 | |
Common Stock | 12,000 | |
Dividends | 600 | |
Service Revenue | 7,900 | |
Maintenance and Repairs Expense | 290 | |
Supplies Expense | 580 | |
Depreciation Expense | 180 | |
Insurance Expense | 150 | |
Salaries and Wages Expense | 2,400 | |
25,880 | 25,880 |
Table (8)
Thus, the total of debit, and credit columns of a trial balance is $25,880 and agreed.
(g)
To prepare: The income statement, statement of retained earnings, and classified balance sheet of Company KWW.
(g)
Explanation of Solution
The income statement of Company KWW for the month ended July 31, 2017 is as follows:
Company KWW | ||
Income Statement | ||
July 31, 2017 | ||
Particulars | Amount ($) | Amount ($) |
Revenues | ||
Service revenue | 7,900 | |
Expenses | ||
Salaries and wages expense | 2,400 | |
Supplies expense | 580 | |
Maintenance and repairs expense | 290 | |
Depreciation expense | 180 | |
Insurance expense | 150 | |
Total expenses | 3,600 | |
Net income | 4,300 |
Table (9)
The Net Income for the month ended July31, 2017 is $4,300.
The retained earnings statement of Company KWW for the month ended July 31, 2017 is as follows:
Company KWW | |
Retained Earnings Statement | |
July 31, 2017 | |
Particulars | Amount ($) |
Retained earnings, July 1, 2017 | |
Add: Net income | 4,300 |
4,300 | |
Less: Dividends | 600 |
Retained earnings, July 31, 2017 | 3,700 |
Table (10)
Hence, retained earnings for the month ended July 31, 2017 is $3,700.
The classified balance sheet at July 31, 2017 is as follows:
Company KWW | ||
Classified Balance Sheet | ||
July 31, 2017 | ||
Particulars | Amount ($) | Amount ($) |
Assets | ||
Current Assets | ||
Cash | 5,410 | |
Accounts receivable | 6,300 | |
Supplies | 320 | |
Prepaid insurance | 1,650 | |
Total current assets | 13,680 | |
Property, plant, and equipment | ||
Equipment | 8,000 | |
Less: Accumulated depreciation | 180 | 7,820 |
Total assets | 21,500 | |
Liabilities and Stockholders’ Equity | ||
Current Liabilities | ||
Accounts payable | 5,400 | |
Salaries and wages payable | 400 | |
Total current liabilities | 5,800 | |
Stockholders’ equity | ||
Common stock | 12,000 | |
Retained earnings | 3,700 | |
Total stockholders’ equity | 15,700 | |
Total liabilities and stockholders’ equity | 21,500 |
Table (11)
Thus the total assets of Company KWW for the month ended July 31, 2017 is $21500 which is equal to the liabilities for the same period.
(h)
Closing entries:
Closing entries are those journal entries, which are passed to transfer the final balances of temporary accounts, (all revenues account, all expenses account and dividend) to the income summary account. Closing entries produce a zero balance in each temporary account.
To prepare: The closing journal entries of Company KWW, and post it to T-accounts.
(h)
Explanation of Solution
The closing entries of Company KWW at July31, 2017 are as follows:
Date | Account Title | Post ref. | Debit ($) | Credit ($) |
July 31 | Service Revenue | 7,900 | ||
Income Summary | 7900 | |||
(To close the revenue account) | ||||
July 31 | Income Summary | 3,600 | ||
Salaries and Wages Expense | 2400 | |||
Supplies Expense Depreciation Expense | 580 | |||
Maintenance and Repairs Expense | 290 | |||
Depreciation Expense | 180 | |||
Insurance Expense | 150 | |||
(To close all the expenses account) | ||||
July 31 | Income Summary | 4,300 | ||
Retained Earnings | 4300 | |||
(To close the income summary account) | ||||
July 31 | Retained Earnings | 600 | ||
Dividends | 600 | |||
(To close the dividend account) |
Table (12)
Description:
Closing entry for revenue account:
In this closing entry, the service revenue account is closed by transferring the amount of service revenue to the income summary account in order to bring the revenue accounts balance to zero. Hence, debit the service revenue account for $7,900, and credit the income summary account for $7,900.
Closing entry for expenses account:
In this closing entry, all the expense are closed by transferring the amount of all expenses to the income summary account in order to bring all the expense accounts balance to zero. Hence, debit the income summary account for $3,600, and credit all the expenses account for $3,600.
Closing entry for income summary account:
In this closing entry, the income summary account is closed by transferring the amount of balance of $4,300
Closing entry for dividend account:
In this closing entry, the entire dividend declared by the company is transferred to the retained earnings. Hence, debit the retained earnings account for $600, and credit the dividends account for $600.
Post the closing transactions to T-accounts of Company KWW on July31, 2017 as follows:
Service Revenue | ||||||||||||||||||||
31-Jul | $7,900 | 7/12 | $3,700 | |||||||||||||||||
7/25 | $2,500 | |||||||||||||||||||
7/31 | $1,700 | |||||||||||||||||||
7/31 | Bal. | 0 | ||||||||||||||||||
Income Summary | ||||||||||||||||||||
31-Jul | $3,600 | 7/31 | $7,900 | |||||||||||||||||
31-Jul | $4,300 | |||||||||||||||||||
7/31 | Bal. | 0 | ||||||||||||||||||
Retained Earnings | ||||||||||||||||||||
31-Jul | $600 | 7/31 | 4,300 | |||||||||||||||||
7/31 | Bal. | $3,700 | ||||||||||||||||||
Dividends | ||||||||||||||||||||
31-Jul | $600 | 7/31 | $600 | |||||||||||||||||
31-Jul | Bal. | 0 | ||||||||||||||||||
(i)
Post closing trial balance:
The post closing trial balance is a summary of all ledger accounts, and it shows the debit and the credit balances after the closing entries are journalized and posted. The post-closing trial balance contains only permanent (balance sheet) accounts, and the debit and the credit balances of permanent accounts should agree.
To prepare: The post-closing trial balance of Company KWW on July31, 2017
(i)
Explanation of Solution
The post-closing trial balance of Company KWW on July31, 2017 is as follows:
Company KWW | ||
Post Closing Trial balance | ||
July 31, 2017 | ||
Particulars | Debit $ | Credit $ |
Cash | 5410 | |
Accounts Receivable | 4,600 | |
Supplies | 900 | |
Prepaid Insurance | 1,800 | |
Equipment | 8,000 | |
Accumulated Depreciation - Equipment | 180 | |
Accounts Payable | 5,400 | |
Salaries and Wages Payable | 400 | |
Common Stock | 12,000 | |
Retained Earnings | 3,700 | |
21,680 | 21,680 |
Table (13)
Thus, the total of debit, and credit columns of a trial balance is $21,680 and agreed.
Want to see more full solutions like this?
Chapter 4 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
- Miller Delivery Service completed the following transactions during December 2016: Dec. 1 Miller Delivery Service began operations by receiving $10,000 cash and a truck with a fair value of $20,000 from Robert Miller. The business issued Miller shares of common stock in exchange for this contribution. 1 Paid $1,000 cash for a four-month insurance policy. The policy begins December 1. 4 Paid $500 cash for office supplies. 12 Performed delivery services for a customer and received $2,000 cash. 15 Completed a large delivery job, billed the customer, $2,500, and received a promise to collect the $2,500 within one week. 18 Paid employee salary, $1,000. 20 Received $15,000 cash for performing delivery services. 22 Collected $800 in advance for delivery service to be performed later. 25 Collected $2,500 cash from customer on account. 27 Purchased fuel for the truck, paying $300 on account. (Credit Accounts Payable) 28 Performed delivery services on account, $700. 29 Paid office rent, $1,600,…arrow_forwardThe Moon Service Inc. engaged in the following transactions during the month of November 2015:• Nov. 01: Issued 20,000 shares of common stock at $20 per share• Nov. 03: Paid office rent for the month of November $500.• Nov. 06: Purchased office supplies $250.• Nov. 12: Purchased office equipment on account $4,500• Nov. 16: Purchased business car for $25,000. Paid $10,000 cash and issued a note for the balance.• Nov. 21: Billed clients $24,000 on account.• Nov. 25: Declared dividends $3,000. The amount of dividends will be distributed in December.• Nov. 28: Paid utility bills for the month of November $180.• Nov. 29: Received $20,000 cash from clients billed on November 21.• Nov. 30: Paid salary for the month of November $7,500Required: Record the above transactions in a general journal.arrow_forwardMike Greenberg opened Sheffield Window Washing Inc. on July 1, 2022. During July, the following transactions were completed. July 1 Issued 12,700 shares of common stock for $12,700 cash. 1 Purchased used truck for $8,480, paying $2,120 cash and the balance on account. 3 Purchased cleaning supplies for $950 on account. 5 Paid $1,920 cash on a 1-year insurance policy effective July 1. 12 Billed customers $3,920 for cleaning services performed. 18 Paid $1,060 cash on amount owed on truck and $530 on amount owed on cleaning supplies. 20 Paid $2,120 cash for employee salaries. 21 Collected $1,700 cash from customers billed on July 12. 25 Billed customers $2,650 for cleaning services performed. 31 Paid $310 for maintenance of the truck during month. 31 Declared and paid $640 cash dividend. The chart of accounts for Sheffield Window Washing contains the following accounts: Cash, Accounts Receivable,…arrow_forward
- Mike Greenberg opened Sheffield Window Washing Inc. on July 1, 2022. During July, the following transactions were completed. July 1 Issued 12,700 shares of common stock for $12,700 cash. 1 Purchased used truck for $8,480, paying $2,120 cash and the balance on account. 3 Purchased cleaning supplies for $950 on account. 5 Paid $1,920 cash on a 1-year insurance policy effective July 1. 12 Billed customers $3,920 for cleaning services performed. 18 Paid $1,060 cash on amount owed on truck and $530 on amount owed on cleaning supplies. 20 Paid $2,120 cash for employee salaries. 21 Collected $1,700 cash from customers billed on July 12. 25 Billed customers $2,650 for cleaning services performed. 31 Paid $310 for maintenance of the truck during month. 31 Declared and paid $640 cash dividend. The chart of accounts for Sheffield Window Washing contains the following accounts: Cash, Accounts Receivable,…arrow_forwardMary Maywood opened Maywood Cleaners on March 1, 2022. During March, the following transactions were completed.Mar.1 Shareholders invested €25,000 cash in the business in exchange for ordinary shares.Mar.1 Borrowed €7,000 cash by signing a 6-month, 8%, €7,000 note payable. Interest will be paid the first day of each subsequent month.Mar.1 Purchased used truck for €9,000 cash.Mar.2 Paid €2,500 cash to cover rent from March 1 through May 31.Mar.3 Paid €3,400 cash on a 6-month insurance policy effective March 1.Mar.6 Purchased cleaning supplies for €2,000 on account.Mar.14 Billed customers €4,700 for cleaning services performed.Mar.18 Paid €700 on amount owed on cleaning supplies.Mar.20 Paid €1,750 cash for employee salaries.Mar.21 Collected €1,800 cash from customers billed on March 14.Mar.28 Billed customers €4,500 for cleaning services performed.Mar.31 Paid €450 for gas and oil used in truck during month (use Maintenance and RepairsExpense).Mar.31 Declared and paid a €1000 cash…arrow_forwardAhmed has just started his own business selling computer equipment and software. The following transactions took place during his first month of trading,June 2018. You are required to enter them into the books of account. 2018 June 1 Started in business with $20,000 in the bank. June 3 Bought stock of computers for resale $8.000 on credit from Computers Wholesale Ltd. June 4 Bought shop fittings paying by cheque, $1,690. June 8 Bought stock of software for resale, $1,000 paid by cheque. June 9 Bought motor car paying by cheque, $7,000. June 12 Sold goods, $1,700 by cheque. June 16 Returned faulty goods to Computers Wholesale Ltd, $900. June 20 Sold goods for cash, $340. June 26 Bought desk and chair for office, $300 paying by cheque. June 28 Sold goods on credit to Law & Co., $1,600. June 29 Paid Computers Wholesale Ltd $5,000 on account by cheque. June 30 Bought goods from Computers Wholesale Ltd on credit, $850. June 30 Law &…arrow_forward
- Mary Maywood opened Maywood Cleaners on March 1, 2022. During March, the following transactions were completed.Mar.1 Shareholders invested €25,000 cash in the business in exchange for ordinary shares.Mar.1 Borrowed €7,000 cash by signing a 6-month, 8%, €7,000 note payable. Interest will be paid the first day of each subsequent month.Mar.1 Purchased used truck for €9,000 cash.Mar.2 Paid €2,500 cash to cover rent from March 1 through May 31.Mar.3 Paid €3,400 cash on a 6-month insurance policy effective March 1.Mar.6 Purchased cleaning supplies for €2,000 on account.Mar.14 Billed customers €4,700 for cleaning services performed.Mar.18 Paid €700 on amount owed on cleaning supplies.Mar.20 Paid €1,750 cash for employee salaries.Mar.21 Collected €1,800 cash from customers billed on March 14.Mar.28 Billed customers €4,500 for cleaning services performed.Mar.31 Paid €450 for gas and oil used in truck during month (use Maintenance and RepairsExpense).Mar.31 Declared and paid a €1000 cash…arrow_forwardThe accounting records and bank statement of Orison Supply Store provide the following information at the end of April. The closing 'Cash' account balance was $28,560, and the bank statement shows a closing balance of $32,000. On reviewing the bank statement it is found an account customer has deposited $2,000 into the bank account for a March sale and the monthly insurance premium of $4,500 was automatically charged to the account. Interest of $5,10 was paid by the bank and a bank fee of $50 was charged to the account. A payment of $1,500 to a supplier has been recorded twice in the accounts. After the ,calculation of the "ending reconciled cash balance", what is the balance of the 'cash' account?arrow_forwardNatalie opened Natalie Washing co. on July 1, 2022. During July, the following transactions were completed. July 1 Owner invests $12,000 cash to start the business. July 3 Purchased used truck for $8,000, paying $2,000 cash and signing a 1-year, 10% note for the remainder. July 5 Purchased clening supplies for $900 on account. July10 Paid $1800 cash on a 1-year insurnace policy effective July 1 July 12 Billed customers $3700 fore cleaning services performed. July 15 Paid $500 on amount owed on cleaning supplies. July 16 Received $2500 for serviced to be performed evenly from July 16 through September 15. July 22 Paid $2000 for employee salaries. July 29 July 30 July 31 Collected $1600 cash from customers billed on July 12. Paid $290 for maintenance of the truck during month. Owner withdrew $600 from the business for personal expenses. Requirements: 1) Make a tabular analysis of the transactions on accounting equation. Use the following column headings: cash, Supplies, accounts…arrow_forward
- SIERRA CORPORATION On October 1, 2014. Sierra Corporation opened for business. The company has a monthly accounting period. The following transactions occurred during the company's first month. October 1 October I Issued 10,000 shares of common stock for $10,000 cash. Borrowed $5,000 from Castle Bank by signing a 3-month, 12%, $5,000 note payable. Purchased equipment by paying $5,000 cash to Superior Equipment Sales Co. Received $1,200 cash from a client for services to be performed in the future. Received $10,000 in cash for services performed. Paid $900 cash for October office rent. Paid $600 cash for a one-year insurance policy effective October 1. Purchased $2,500 of supplies on credit from Aero Supply. Paid a $500 cash dividend to stockholders. Paid $4,000 cash for employee salaries. October 2 October 2 October 3 October 3 October 4 October 5 October 20 October 26 The chart of accounts for Sierra Corporation includes the following accounts. Cash Accounts Receivable Supplies…arrow_forwardMike Greenberg opened Bramble Window Washing Inc. on July 1, 2022. During July, the following transactions were completed. July 1 Issued 12, 200 shares of common stock for $ 12,200 cash. 1 Purchased used truck for $7,400, paying $1,900 cash and the balance on account. 3 Purchased cleaning supplies for $900 on account. 5 Paid $1,800 cash on a 1-year insurance policy effective July 1. 12 Billed customers $3,900 for cleaning services performed. 18 Paid $900 cash on amount owed on truck and $500 on amount owed on cleaning supplies. 20 Paid $2,200 cash for employee salaries. 21 Collected $1,500 cash from customers billed on July 12. 25 Billed customers $2,300 for cleaning services performed. 31 Paid $320 for maintenance of the truck during month. 31 Declared and paid $600 cash dividend. FIND THE BRAMBLE WINDOW WASHING INC. TRIAL BALANCE (PREPARE A TRILE BALANCE AT JULY 31arrow_forwardDecember 2011, Jillian Powell organized a corporation to provide package delivery services. The company, called Tone Deliveries, Inc., began operations immediately. Transactions during the month of March were as follows: Dec. 2 The Corporation issued 400,000 shares of capital stock to Jillian Powell in exchange for 800,000 cash. Dec. 4 purchased a truck for 450,000. Made a 150,000 cash down payment and issued a note payable for the remaining balance. Dec. 5 Paid Sloan Properties 25,000 to rent office space for the month. Dec. 9 Billed customers 11,300 for services for the first half of March. Dec. 15 paid 7,100 in salaries earned by employees during the first half of March. Dec. 19 Paid Bill’s Auto 9000 for maintenance and repair services on the company truck. Dec. 20 Collected 38000 of the amounts billed to customers on March 9. Dec. 28 Billed customers 14,400 for services performed during the second half of the month. Dec. 30 Paid…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education