a) On the first day of the month Javier opened a bank account in the name of the
ID: 2340943 • Letter: A
Question
a) On the first day of the month Javier opened a bank account in the name of the business; in which I deposit $ 25,000. b) $ 600 was paid in cash for the month's rent. c) A used truck was purchased for $ 8,000 in cash. d) Tools were purchased for $ 3,000 on credit at Home Depot. e) $ 150 was paid in cash for the use of electric power. f) $ 1,500 was paid in advance for a 2-year insurance for the truck. g) Customers paid the business $ 3,000 in cash for services received. h) Pay $ 700 of salary to an employee. i) Javier prepares a plot of land and the client makes a cash payment for $ 2,500 and he has to pay $ 1,000. j) Pay $ 35 of the telephone bill. k) Javier buys $ 300 in office equipment. Pay $ 100 in cash and take the remaining $ 200 on credit. l) Of the money owed by the client in letter i, the client pays $ 500. m) Javier pays an employee $ 850 salary. n) Javier pays $ 1,000 of the tools purchased in letter d. o) The business generated $ 2,000 more in income; of which he received $ 1,400 in cash and $ 600 remain receivable. p) The owner withdraws $ 500 from the business account for personal use. and make the T Accounts, Trial Balance, Income Statement, Retained Earnings Statement and Balance Sheet Statement.
Explanation / Answer
Cash
(a)
$25000
(b)
$600
(g)
$3000
(c)
$8000
(i)
$2500
(e)
$150
(L)
$500
(f)
$1500
(o)
$1400
(h)
$700
(j)
$35
(k)
$100
(m)
$850
(n)
$1000
(p)
$500
Ending balance
$18965
Withdrawals
(p)
$500
Ending balance
$500
Office equipment
(k)
$300
Ending balance
$300
Telephone expense
(j)
$35
Ending balance
$35
Salary expense
(h)
$700
(m)
$850
Ending balance
$1550
Prepaid Insurance
(f)
$1500
Ending balance
$1500
Service revenue
(g)
$3000
(i)
$3500
(o)
$2000
Ending balance
$8500
Accounts receivable
(i)
$1000
(L)
$500
(o)
$600
Ending balance
$1100
Capital
(a)
$25000
Ending balance
$25000
Rent Expense
(b)
$600
Ending balance
$600
Truck
(c)
$8000
Ending balance
$8000
Tools
(d)
$3000
Ending balance
$3000
Accounts payable
(n)
$1000
(d)
$3000
(k)
$200
Ending balance
$2200
Electricity Power
(e)
$150
Ending balance
$150
Trial Balance
Accounts Title
Debit
Credit
Cash
$18965
Capital
$25000
Rent expense
$600
Truck
$8000
Accounts payable
$2200
Electric power expense
$150
Prepaid insurance
$1500
Service revenue
$8500
Salary expense
$1550
Telephone expense
$35
Office equipment
$300
Accounts receivable
$1100
Tools
$3000
Withdrawals
$500
$35700
$35700
Income Statement
Service revenue
$8500
Less:
Rent expense
($600)
Electric power expense
($150)
Salary expense
($1550)
Telephone expense
($35)
Net income
$6165
Statement of Retained Earnings
Beginning balance
$0
+ Net income
$6165
- Dividends paid
$0
Ending balance
$6165
Balance Sheet
ASSETS;
$
$
Current Assets:
Cash
$18965
Accounts receivable
$1100
Prepaid insurance
$1500
Total current assets
$21565
Non-current Assets:
Tools
$3000
Truck
$8000
Office equipment
$300
$11300
Total assets
$32865
LIABILITIES
Current Liabilities;
Accounts payable
$2200
Total current liabilities
$2200
Equity;
Capital
$25000
- Withdrawal
($500)
Retained earnings
$6165
$30665
Total liabilities and equity
$32865
Cash
(a)
$25000
(b)
$600
(g)
$3000
(c)
$8000
(i)
$2500
(e)
$150
(L)
$500
(f)
$1500
(o)
$1400
(h)
$700
(j)
$35
(k)
$100
(m)
$850
(n)
$1000
(p)
$500
Ending balance
$18965
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