Question: E2-21 Journalizing transactions from T-accounts In December 2018, the first five transactions of Abling’s Lawn Care Company have been posted to the T-accounts. Prepare the journal entries that served as the sources for the five transactions. Include an explanation for each entry
T-Account is a ledger account in the form t-shape and journal entries are recorded. Journal entry shown in step 2.
T-Account is defined as the summarised format of the ledger accounts which is prepared in the form of a T-shape.
(Common stock issued for cash)
(Office supplies purchased on credit)
(Building purchased for cash)
(Cash raised using notes payable)
(Equipment purchased using cash)
Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance
Ann Simpson started her practice as a design consultant on September 1, 2018. During the first month of operations, the business completed the following transactions:
Sep. 1 Received $48,000 cash and issued common stock to Simpson.
4 Purchased office supplies, $1,200, and furniture, $1,300, on account.
6 Performed services for a law firm and received $1,900 cash.
7 Paid $18,000 cash to acquire land to be used in operations.
10 Performed services for a hotel and received its promise to pay the $1,200 within one week.
14 Paid for the furniture purchased on September 4 on account.
15 Paid assistant’s semimonthly salary, $1,500.
17 Received cash on account, $1,000.
20 Prepared a design for a school on account, $650.
25 Received $2,100 cash for design services to be performed in October.
28 Received $2,900 cash for consulting with Plummer & Gordon.
29 Paid $600 cash for a 12-month insurance policy starting on October 1.
30 Paid assistant’s semimonthly salary, $1,500.
30 Paid monthly rent expense, $600.
30 Received a bill for utilities, $350. The bill will be paid next month.
30 Paid cash dividends of $3,700.
Requirements 4. Prepare the trial balance of Ann Simpson, Designer, as of September 30, 2018.
Journalizing transactions, posting to T-accounts, and preparing a trial balance
Consider the following transactional data for the first month of operations for Crystal Clear Cleaning.
Nov. 1 Stockholders contributed $15,000 and a truck, with a market value of $3,000, to the business in exchange for common stock.
2 The business paid $4,000 to Pleasant Properties for November through February rent. (Debit Prepaid Rent)
3 Paid $4,800 for a business insurance policy for the term November 1, 2018 through October 31, 2019. (Debit Prepaid Insurance)
4 Purchased cleaning supplies on account, $320.
5 Purchased on account an industrial vacuum cleaner costing $1,500. The invoice is payable November 25.
7 Paid $3,900 for a computer and printer.
9 Performed cleaning services on account in the amount of $4,700.
10 Received $200 for services rendered on November 9. 15 Paid employees, $400.
16 Received $15,000 for a 1-year contract beginning November
16 for cleaning services to be provided. Contract begins November 16, 2018, and ends November 15, 2019. (Credit Unearned Revenue)
17 Provided cleaning services and received $400 cash.
18 Received a utility bill for $175 with a due date of December 4, 2018. (Use Accounts Payable)
20 Borrowed $36,000 from bank with interest rate of 6% per year.
21 Received $500 on account for services performed on November 9.
25 Paid $750 on account for vacuum cleaner purchased on November 5.
29 Paid $200 for advertising.
30 Cash dividends of $1,400 were paid to stockholders
3. Post the journal entries to the T-accounts, and calculate account balances
Question: Preparing financial statements from the trial balance and calculating the debt ratio
Preparing financial statements from the trial balance and calculating the debt ratio
Account Title Debit Credit
Office Supplies 1,400
Accounts Receivable 9,100
Prepaid Insurance 2,600
Accounts Payable 3,400
Unearned Revenue 1,296
Notes Payable 34,000
Common Stock 20,000
Salaries Expense 1,600
Rent Expense 700
Utilities Expense 100
Service Revenue 15,804
Total Balance $ 74,500 $ 74,500
Requirements 4. Calculate the debt ratio as of July 31, 2018.
Question: The following transactions occurred for Lawrence Engineering:
Jul. 2 Received $14,000 contribution from Brett Lawrence in exchange for common stock.
4 Paid utilities expense of $370.
5 Purchased equipment on account, $1,600.
10 Performed services for a client on account, $2,900.
12 Borrowed $7,100 cash, signing a notes payable.
19 Cash dividends of $200 were paid to stockholders.
21 Purchased office supplies for $840 and paid cash.
27 Paid the liability from July 5.
Requirements 1. Open the following T-accounts for Lawrence Engineering: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock; Dividends; Service Revenue; and Utilities Expense.
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