Barbara Jones opened Barb\'s Book Business on Februery 1. You have been hired to
ID: 2332664 • Letter: B
Question
Barbara Jones opened Barb's Book Business on Februery 1. You have been hired to maintain the company's financial records. The following transactions occurred in February, the first month of operations. Received shareholders cash contributions on February 1 totaling $15.000 to form the corporation, issued 1,000 shares of common stock b Paid $3,375 cash on February 2 for three months' rent for office space. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent) At the end of the e month, this account will be a Purchased and received supplies on February 3 for $720 cash. d Signed a promissory note on February 4, payable in two years: deposited $17000 in the company's bank account e On February 5, paid cash to buy equipment for $5,500 and land for $11,500 fPlaced an advertisement in the local paper on February 6 for $890 cash g Recorded sales on February 7 totaling $4.400 $1.950 was in cash and the rest on accounts receivable h Collected accounts receivable of $147 from customers on February 8 . On February 9, repaired one of the computers for $153 cash djusted to its proper balance. TIP: Most repairs involve costs that do not provide additional future economic benefi J Incurred and paid employee wages on February 28 of $640 Required: 1. Prepare the journal entry for each of the above transactions 2. Post the transection ectivity from requirement t to the T-Accounts below All accounts begin with zero balances because this is the first month of operetions. 4-a. Réfer to the revenues and expenses snown on the unad usted trial balance, Besed on this information, calculate preliminary net 4-b.D 3. Prepare an unadjusted trial b income and net profit margin? hen the 13 percent earmed by a close competitor
Explanation / Answer
Transaction General Journal Debit Credit (a) Cash $15,000 Common stock $15,000 (to record issue of 1000shares of commontock) (b) Prepaid Rent $3,375 Cash $3,375 (To record payment of rent in advance) .(c) Supplies $720 Cash $720 (To record purchase of supplies) (d) Cash $17,000 Notes Payable $17,000 (To record receipt of cash against notes pyable) (e) Equipment $5,500 Land $11,500 Cash $17,000 (To record purchase of Equipment and Land) (f) Advertising expense $890 Cash $890 (To record advertiing expense) (g) Cash $1,950 Accounts receivable $2,450 (4400-1950) Sales $4,400 (To record sales) (h) Cash $147 AccountsReceivable $147 (To record collection of receivables) (i) Repair expense $153 Cash $153 (Torecord repair expense) (j) Wages expense $640 Cash $640 (To record wages expense)
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