Accumulated depreciationMachine Loss on disposal of machine Cash Accumulated depletion
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Akash M.
Barbara Jones opened Barb's Book Business on February 1, 2013. You have been hired to maintain the company's financial records. The following transactions occurred in February 2013, the first month of operations.a. Received shareholders' cash contributions totaling $16,000 to form the corporation; issued stock.b. Paid $2,400 cash for three months' rent for office space Rent). At the end of the month, this account will be adjusted to its proper balance. We will study this adjustment process in Chapter 4, so just leave it as Prepaid Rent for now.c. Purchased supplies for $300 cash.d. Signed a promissory note, payable in two years; deposited $10,000 in the company's bank account.e. Used the money from ( d ) to purchase equipment for $7,500 and other noncurrent assets for $2,500.f. Placed an advertisement in the local paper for $425 cash.g. Made sales totaling $1,800; $1,525 was in cash and the rest on accounts receivable.h. Incurred and paid employee wages of $420.i. Collected accounts receivable of $50 from customers.j. Repaired one of the computers for $120 cash.Required:1. Set up appropriate T-accounts for Cash, Accounts Receivable, Supplies, Prepaid Rent, Equipment, Other Noncurrent Assets, Notes Payable, Contributed Capital, Service Revenue, Advertising Expense, Wages Expense, and Repair Expense. All accounts begin with zero balances because this is the first month of operations. liabilities, stockholders' equity, revenues, and expenses.2. Record in the T-accounts the effects of each transaction for Barb's Book Business in February, referencing each transaction in the accounts with the transaction letter. Show the unadjusted ending balances in the T-accounts.3. Prepare an unadjusted trial balance at the end of February.4. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and write a short memo to Barbara offering your opinion on the results of operations during the first month of business.
Journal entries, posting to ledger, and trial balance Non-GST version On 1 July 2021, Tanya Arthur opened a hairdressing salon. The following transactions occurred during the first month of operations (ignore GST). July 2: Arthur invested $120,000 in the business by depositing cash into a business cheque account with the Eastpac Bank. July 2: Paid $1,800 for the first month's rent. July 3: Purchased equipment by an online bank transfer for $32,000 and signed a commercial loan agreement for $38,000. July 4: Purchased supplies for $8,400. July 6: Paid advertising expense of $1,230. July 16: Recorded services revenue for the first half of the month of $3,250 in cash and $620 on credit. July 20: Paid insurance expense for July of $480 using an online bank transfer. July 23: Received a $200 payment from customers who paid on credit in the first half of the month. July 28: Arthur withdrew $560 cash for personal living expenses. July 31: Recorded revenue for the second half of the month of $3,680 in cash and $580 on credit. July 31: Paid telephone account of $440 by electronic transfer. Use the following account titles and numbers: Cash at Bank, 100; Accounts Receivable, 101; Supplies, 102; Equipment, 103; Loan Payable, 200; Tanya Arthur, Capital, 300; Tanya Arthur, Drawings, 301; Revenue, 400; Rent Expense, 500; Advertising Expense, 501; Insurance Expense, 502; Telephone Expense, 503. Required: (a) Prepare the general journal entries to record the transactions. (b) Post the entries from the general journal to the general ledger accounts (running balance format) and enter the posting references in the general journal. (c) Prepare a trial balance as at 31 July 2021. (LO3, LO4 and LO5)
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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