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Q6QS-3

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Financial & Managerial Accounting
Found in: Page 52
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Question: For each transaction,

(3) post the entry using T-accounts to represent ledger accounts.

Use the following (partial) chart of accounts—account numbers in parentheses: Cash (101); Accounts Receivable (106); Office Supplies (124); Trucks (153); Equipment (167); Accounts Payable (201); Unearned Landscaping Revenue (236); Common Stock (307); Dividends (319); Landscaping Revenue (403); Wages Expense (601); and Landscaping Expense (696).

a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value in exchange for common stock.

b. On May 21, Elegant Lawns purchases office supplies on credit for $500.

c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.

d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.

Answer

Total cash account amounts to $12,000.

See the step by step solution

Step by Step Solution

Step 1: Ledger Account

A ledger account is the specific record of all debits and credits of a particular item like cash, inventory, expenses, etc.

The collection of all ledger accounts is called the general ledger.

 Step 2:

Cash Account No. 101

Date

PR

Debit

Credit

Balance

May 15

G1

$ 7,000

$ 7,000

25

G1

4,000

11,000

30

G1

1,000

12,000

Office Supplies Account No. 124

Date

PR

Debit

Credit

Balance

May 21

G1

$ 500

$ 500

Equipment Account No. 167

Date

PR

Debit

Credit

Balance

May 25

G1

$ 4,000

$ 4,000

Accounts payable Account No. 201

Date

PR

Debit

Credit

Balance

May 21

G1

$ 500

$ 500

Unearned landscaping revenue Account No. 236

Date

PR

Debit

Credit

Balance

May 30

G1

$ 1,000

$ 1,000

Common Stock Account No. 307

Date

PR

Debit

Credit

Balance

May 15

G1

$ 10,000

$ 10,000

Landscaping Revenue Account No. 403

Date

PR

Debit

Credit

Balance

May 25

G1

$ 4,000

$ 4,000

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