The Fast Delivery Service submitted the transactions given below. Analyze these
ID: 2359949 • Letter: T
Question
The Fast Delivery Service submitted the transactions given below. Analyze these business transactions.a. On October 1st, Joseph took $25,000 from personal savings and deposited the amount to open a business checking account in the name of Fast Delivery Service.
b. On October 2nd, Joseph took two telephones valued at $200 each from his home and transferred them to the business as office equipment.
c. On October 4th, Fast Delivery Service issued check no. 101 for $3,000 to buy a computer system.
d. On October 9th, Fast Delivery Service bought a used truck on account from North Shore Auto for $12,000.
Instructions:
1. In your notebook, prepare a T account for each account.
2. Analyze and record each of the following business transactions in the appropriate T accounts.
3. Identify each transaction by number.
4. After recording all transactions, compute and record the account balance on the normal balance side of each T account.
5. Add the balances of the accounts with normal debit balances.
6. Add the balance of the accounts with normal credit balance.
7. Compare the two totals.
Explanation / Answer
Its kind of hard to draw T-Accounts in this program, but i will explain them. First by doing the journal entries for each answer, underneath i will cite which T account they will go under. I will total the T accounts at the end and compare the totals.
A.) Cash (Dr) 25,0000
Paid In Capital(Cr) 25,000
B.) Office Equipment (Dr) 400
Paid In Capital (Cr) 400
C.) Office Equipment (Dr) 3,000
Cash (Cr) 3,000
D.) Truck (Dr) 12,000
Accounts Payable (Cr) 12,000
The Paid in Capital account will have a 25,400 credit balance.
The Accounts Payable will have a 12,000 credit balance.
Total Credit Balances = 37,400
The Cash Account will have a debit balance of 22,000
The Office Equipment account will have a debit balance of 3,400
The Truck account balance will have a 12,000 debit balance
Total Debit Balances = 37,400
Debits and Credits should match and they do.
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