Master College Concepts with Expert Q&A and Solutions

a. Issued common stock for cash 2,000 b. Paid cash for three month's rent: December 2019, January and February 2020 2,400 c. Purchased a used truck on credit (recorded as an account payable) 13,000 d. Purchased supplies on credit. These are expected to be used during the month (recorded as expense) 1,600 e. Paid for a one-year truck insurance policy, effective December 1 2,280 f. Billed a customer for work completed to date 6,000 g. Collected cash for work completed to date 4,000 h. Paid the following expenses in cash: Advertising 700 Interest 700 Telephone 800 Truck operating 600 Wages 5,000 i. Collected part of the amount billed in f above 1,000j. Billed customers for work completed to date 7,000 k. Signed a contract for work to be performed in January 2020 9000 5,000 l. Paid the following expenses in cash: Advertising 600 Interest 600 Truck operating 900 Wages 2,000 m. Collected an advance on work to be done in January (the policy of the coproration is to record such advances as revenue at the the time they are received) 2,000 n. Received a bill for electricity used during the month (recorded as utilities expense) 800 December Adjusting Entries Amount o. One month of the prepaid insurance has expired. $170 p. The December portion of the rent paid on December 1 has expired. $900 q. Counted supplies and found this amount still on hand (recorded the amount used as an expense) $100 r. The amount collected in transaction m is unearned at December 31. $2,000 s. Three days of wages for December 29, 30, and 31 are unpaid. These will be paid in January. $2,900 t. One month of depreciation needs to be recorded. Estimated useful life of truck in years is: 361.1111111 3 u. Income taxes expense to be paid in the next fiscal year. $100 7 Prepare closing entries and a post-closing trial balance at December 31, 2019.
Grace Stewart began the Stewart Answering Service in December. The firm provides services for professional people and is currently operating with leased equipment. On January 1, the assets and liabilities of the business were:Cash 6400 Accounts Receivable 6900Accounts Payable 1600Notes Payable 1500Common Stock 10200Retained Earnings 0 The following transactions occurred during the month of January: 1 Paid rent on office and equipment for January, $1,800. 2 Collected $6,000 on account from clients. 3 Borrowed $3,000 from a bank and signed a note payable for that amount. 4 Billed clients for work performed on account, $12,500. 5 Paid $1,400 on accounts payable. 6 Received invoice for January advertising, $800. 7 Paid January salaries, $3,200. 8 Paid January utilities, $430. 9 Paid stockholders a dividend of $3,600 cash. 10 Purchased a printer (on January 31) for business use, $1,400, 11 Paid $30 to bank as January interest on the outstanding note payable. Required(a) Set up an accounting equation in columnar form with the following individual assets, liabilities, and stockholders' equity accounts: Cash, Accounts Receivable, Equipment, Accounts Payable, Notes Payable, Common Stock, and Retained Earnings. Enter the January 1 balances below each item. (Note: The beginning Equipment account balance is $0.)(b) Show the impact (increase or decrease) of the January transactions on the beginning balances, and total all columns to show that assets equal liabilities plus stockholders' equity as of January 31.
On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July.A. Opened a business bank account with a deposit of $25,000 from personal funds.B. Purchased office supplies on account, $1,850.C. Paid creditor on account, $1,200.D. Earned sales commissions, receiving cash, $41,500.E. Paid rent on office and equipment for the month, $3,600.F. Withdrew cash for personal use, $4,000.G. Paid automobile expenses (including rental charge) for the month, $3,050, and miscellaneous expenses, $1,600.H. Paid office salaries, $5,000.I. Determined that the cost of supplies on hand was $950; therefore, the cost of supplies used was $900.Required:1. Indicate the effect of each transaction and the balances after each transaction, using the tabular headings in the exhibit below. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.Assets = Liabilities + Owners Equity Pat Pat Accounts Glenn, Glenn, Sales Salaries Rent Auto Supplies MiscellaneousCash + Supplies = Payable + Capital - Drawing + Commissions - Expense - Expense - Expense - Expense - Expense2. Prepare an income statement for July, a statement of owners equity for July, and a balance sheet as of July 31. Refer to the list of Accounts on the accounting equation grid and the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss has been incurred, enter that amount as a negative number using a minus sign. You will not need to enter colons (:) on the statements.