Ace Lawn Care Module 1 Mini Practice Problem Jim Graham started his career mowin
ID: 2407590 • Letter: A
Question
Ace Lawn Care Module 1 Mini Practice Problem Jim Graham started his career mowing lawns for neighbors while he was in junior high school. Jim worked summers for the local golf course while he was in high school and now that he has graduated, he is starting his own lawn care business. You are taking an accounting class at the local community college and have agreed to help Jim set up and maintain the accounting records for his new business. He has set up a checking account in the business name, Ace Lawn Care, at the local bank. After some discussion with you, Jim has decided to set the business up as a sole proprietorship. You and Jim established a chart of accounts to be used in recording the business transactions. In May, 2014, the following activities occur at Ace Lawn Care. May 1 Jim withdraws $15,000 from his savings account and deposits it in the business bank account. May 2 Jim purchases a used truck for $5,000 to use for the lawn care business, he writes a check for $2,000 and signs a 1 year, 6% note for the balance May 5 Jim purchases a lawn mower for $300 and an aerator for $500 and writes a check for the total amount May 6 Jim writes a $600 check for a six month insurance policy that expires October 31 2014 Jim establishes a $500 line of credit account with Jones Fuel, a local gas station. Jim writes a check for $50 for a weekly advertisement in the local newspaper May 7 May 8 The advertisement will run every Friday through the end of May, 2014. May 16 At the end of the first week, Jim has earmed $600 for lawn care services. Of the $600, $500 was paid in cash and $100 was on credit May 23 At the end of the second week, Jim has eamed $1,100 for lawn care services. Of the $1,100, $700 was paid in cash and $400 was on credit Jim writes a check for $50 to have the mower blade sharpened. At the end of the third week, Jim has earned $1,000 for lawn care services. Of the May 26 May 30 $1,000, $800 was paid in cash and $200 was on credit Jim receives payments, on account, in the amount of $500 Jim receives his monthly invoice and writes a check for $150 to Jones Fuel. Jim writes a check to himself for $1,000 for personal expenses. May 31 May 31Explanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-May Cash 15,000.00 Owner's Capital 15,000.00 (To record the capital introduced) 2-May Equipment 5,000.00 Cash 2,000.00 Notes Payable 3,000.00 (To record the truck purchased) 5-May Equipment 800.00 Cash 800.00 (To record the lawn mover and aerator purchased) 6-May Prepaid Insurance 600.00 Cash 600.00 (To record the insurance purchased) 7-May No entry 8-May Advertising Expense 50.00 Cash 50.00 (To record the advertsing expense) 16-May Cash 500.00 Accounts Receivable 100.00 Lawn Service Revenue 600.00 (To record the lawn service revenue earned) 23-May Cash 700.00 Accounts Receivable 400.00 Lawn Service Revenue 1,100.00 (To record the lawn service revenue earned) 26-May Repair & Maintenance Expense 50.00 Cash 50.00 (To record the lawn mover blade sharpened) 30-May Cash 800.00 Accounts Receivable 200.00 Lawn Service Revenue 1,000.00 (To record the lawn service revenue earned) 31-May Cash 500.00 Accounts Receivable 500.00 (To Record the cash received) 31-May Fuel Expenses 150.00 Cash 150.00 (To record the fuel expenses) 31-May Owner's Drawing 1,000.00 Cash 1,000.00 (To record the Jim drawings) Answer 2. Cash Accounts Receivable Supplies Beg. Bal. - 2,000.00 2-May Beg. Bal. - 500.00 31-May Beg. Bal. - 1-May 15,000.00 800.00 5-May 16-May 100.00 16-May 500.00 600.00 6-May 23-May 400.00 23-May 700.00 50.00 8-May 30-May 200.00 30-May 800.00 50.00 26-May 31-May 500.00 150.00 31-May 1,000.00 31-May End. Bal. 12,850.00 End. Bal. 200.00 End. Bal. - Prepaid Insurance Equipment Accumulated Depreciation - Equipment Beg. Bal. - Beg. Bal. - Beg. Bal. - 6-May 600.00 2-May 5,000.00 5-May 800.00 End. Bal. 600.00 End. Bal. 5,800.00 End. Bal. - Accounts Payable Notes Payable Interest Payable Beg. Bal. - Beg. Bal. - Beg. Bal. - 3,000.00 2-May End. Bal. - End. Bal. 3,000.00 End. Bal. - Owner's Capital Owner's Drawing Lawn Service Revenue Beg. Bal. - Beg. Bal. - Beg. Bal. - 15,000.00 1-May 31-May 1,000.00 600.00 16-May 1,100.00 23-May 1,000.00 30-May End. Bal. 15,000.00 End. Bal. 1,000.00 End. Bal. 2,700.00 Supplies Expenses Fuel Expenses Repair and Maintenance Expenses Beg. Bal. - Beg. Bal. - Beg. Bal. - 31-May 150.00 26-May 50.00 End. Bal. - End. Bal. 150.00 End. Bal. 50.00 Advertising Expenses Insurance Expenses Depreciation Expenses Beg. Bal. - Beg. Bal. - Beg. Bal. - 8-May 50.00 End. Bal. 50.00 End. Bal. - End. Bal. - Interest Expenses Beg. Bal. - End. Bal. - Answer 3. ACE LAWN CARE Unadjusted Trial Balance Fo the Month Ended May-31 Particulars Dr. Amt. Cr. Amt. Cash 12,850.00 Accounts Receivable 200.00 Supplies - Prepaid Insurance 600.00 Equipment 5,800.00 Accumulated Depreciation - Equipment - Accounts Payable - Notes Payable 3,000.00 Interest Payable - Owner's Capital 15,000.00 Owner's Drawing 1,000.00 Lawn Service Revenue 2,700.00 Supplies Expenses - Fuel Expenses 150.00 Repair and Maintenance Expenses 50.00 Advertising Expenses 50.00 Insurance Expenses - Depreciation Expenses - Interest Expenses - Total 20,700.00 20,700.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.