Transaction Date Description 12/1 Issued 100,000 shares of common stock for $100

Question

Transaction Date Description 12/1 Issued 100,000 shares of common stock for $100,000 A retail space is rented. Paid for one year of rent in advance totaling $24,000. (rent is $2,000 per month) 12/4 12/5 Purchased S1,500 of supplies on account. 12/7 Provided services to customers for cash totaling $5,000. 12/9 Purchased equipment for the business totaling $36,000 4 Purchased an ad in the local newspaper to run d Customers purchased $1,000 of gift certificates for services to be Paid employee salaries for the first half of December totaling uring December for $400. provided in the future (pre-paid for future services) 12/15 S1,200 12/17 Paid $1,000 for the supplies that were purchased on December 5t 2/20Provided $2,500 of services to customers on account. 12/25Paid a cash dividend of $800 to the shareholders 10 12 12/30 Received S1,500 on account for services provided on 12/20

Explanation / Answer

Part 4-Journal Enrty Sr.no. Date Description Debit($) Credit($) 1 12/01 Cash A/c......Dr 1,00,000 To Common Stock 1,00,000 (Being issue 100000 share of common stock for $100000) 2 12/2 Prepaid Expenses A/c..............Dr 24,000 To Cash A/c 24,000 (Being rent paid in advance for one year) 3 12/4 Equipment A/c....................Dr 36,000 To Cash A/c 36,000 (Being Equipment ppurchased for business) 4 12/5 Supplies A/c......................Dr 1,500 To Accounts Payable 1,500 (Being purchased $1,500 of supplies on account) 5 12/7 Cash A/c.......................Dr 5,000 To Service Revenue   5,000 (Being provided services to customer) 6 12/9 Advertisement Expenses A/c.........Dr 400 To Cash 400 (Being purchsed an ad in local newspaper) 7 12/12 Cash A/c................Dr 1,000 Cash Advance.......... 1,000 (being customer purchased gift certificate for services to be provided in future) 8 12/15 Salaries A/c......Dr 1,200 To Cash 1200 9 12/17 Accounts payable A/c...........Dr 1,000 To Cash 1,000 10 12/20 Account Receivable A/c.......Dr 2,500 To Service Revenue 2,500 11 12/25 Dividend A/c................Dr 800 To Cash 800 12 12/30 Cash A/c...................Dr 1,500 To Account Receivable 1,500 Part 5-Adjusting Entries Sr.No. Date Description Debit($) Credit($) Adj.1 12/31 Rent Account...Dr 2,000 To Prepaid Rent 2,000 (Being rent paid for the month of December) Adj.2 12/31 Depreciation A/c...........Dr 600 To Equipment A/c 600 (being depreciation for the month of dec charged) Adj.3 12/31 Supplies Expenses A/c.....Dr 500 To Supplies A/c 500 Adj.4 12/31 Cash advance A/c......Dr 700 To Service revenue 700 (Being $700 goft certificates redeemded by customer) 5 12/31 Salary A/c.....Dr 1400 To Outstandig Salary 1400 (Being salary for the second half of the december remain unpaid) Part6- Adjusted Trial Balance Descripation Debit Credit Cash 44,100 0 Common Stock 0 1,00,000 Prepaid Expenses 22,000 0 Equipment 35,400 0 Supplies 1000 0 Accounts Payable 0 500 Service revenue 0 8200 Advertisement Expenses 400 0 Cash Advance 0 300 Salary 2600 0 Account Receivable 1000 0 Dividend paid 800 0 Rent 2000 0 Depreciation 600 0 outstanding salary 0 1400 Supplies Expenses 500 0 Total 110,400 110,400 Part 7-Income Statement Descripton Debit($) Descripton Credit($) Service Revenue 8,200 Advertisement Expenses 4,00 0 Salary 2,600 0 Dividend 8,00 0 Rent 2,000 0 Depreciation 6,00 0 Supplies Expenses 5,00 0 Net profit 1,300 Total 8,200 Total 8,200 Part 9- Balance Sheet Description Amount($) Liabilities Common Stock $1,00,000 Net Profit $1,300 Accounts Payable $5,00 Cash advance $300 Outstanding Salary $1,400 Total $103,500 Asset Equipment $35,400 Cash $44,100 Prepaid Expenses $22,000 Supplies $1,000 Account Receivable $1,000 Total $103,500

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