Fahed inherited a large sum of money and decided to open up his own business. He
ID: 2417176 • Letter: F
Question
Fahed inherited a large sum of money and decided to open up his own business. He decided to open up a mechanic shop for fixing high end sports cars, naming his business Fahed Fixes Fast Cars.
The following transactions took place during the month of August, 2015:
August 1: Fahed invested 500,000 in a new business called Fahed Fixes Fast Cars.
August 2: Fahed transferred some mechanic tools worth 15,000 from his home to the business.
August 4: The business purchased repair equipment valued at 70,000 on account from ‘Tools R Us’
August 5: The business purchased mechanic tools for 25,000 in cash.
August 6: The business wrote check 101 for 6,000 for rent of the mechanic shop.
August 10: The business received its first customer and made a minor repair for a customer’s car for 5,000 in cash.
August 11: The business repaired a car for 14,000 on account for customer Kobe Bryant.
August 12: The business wrote check 102 in the amount of 10,000 as partial payment for the repair equipment purchased on August 4th from ‘Tools R Us.’
August 14: The business wrote check 103 in the amount of 4,800 for the insurance bill for the month.
August 15: The business repaired a customer’s car for 19,200 on account for customer Derek Jeter.
August 20: The business received a check in the amount of 8,500 as partial payment for the repairs previously made for customer Kobe Bryant on August 11th.
August 21: The business paid the employee salaries for $12,000 in cash.
August 22: Fahed withdrew $4,000 in cash for personal use.
August 23: The business repaired a customer’s car for $7,800 in cash.
August 24: The business received full payment for the repairs made for Derek Jeter on August 15th.
Include an additional 5 transactions of your own below:
August 25: The business received a check for the rest of the payment for the repairs previously provided on account.
August 27:
August 28
August 29:
August 31:
Fahed Fixes Fast Cars
Chart of Accounts
101
Cash in Bank
201
A/P - Tool Time
401
Repair Revenue
102
A/R - Kobe Bryant
202
A/P - Tools R Us
501
Rent Expense
103
A/R - Derek Jeter
301
Fahed, Capital
502
Salary Expense
104
A/R - Tom Brady
302
Fahed, Drawings
503
Insurance Expense
105
Mechanic Tools
504
Utilities Expense
106
Repair Equipment
107
Office Supplies
108
Office Equipment
QUESTION : WRITE THE ADDITIONAL 5 TRANSACTIONS IN SENTENCES AS THE ONES ABOVE AND ONLY JOURNALIZE THE 5 TRANSACTIONS
PLEASE WRITE THEM IN WORDS(SENTENCES) AND THEN JOURNALIZE IT ONLY THE 5 ADDITIONAL ONES NOT ALL OF THEM
Fahed Fixes Fast Cars
Chart of Accounts
101
Cash in Bank
201
A/P - Tool Time
401
Repair Revenue
102
A/R - Kobe Bryant
202
A/P - Tools R Us
501
Rent Expense
103
A/R - Derek Jeter
301
Fahed, Capital
502
Salary Expense
104
A/R - Tom Brady
302
Fahed, Drawings
503
Insurance Expense
105
Mechanic Tools
504
Utilities Expense
106
Repair Equipment
107
Office Supplies
108
Office Equipment
Explanation / Answer
Additional 5 Transactions:
August 27 - Fahed made payment $ 8,000 on account to Tools R Us for repair equipment purchased on August 4
August 28 - Made repair of Car for $ 5,000 for against which received payment simultaneously
August 29 - Withdrew $ 5,500 in Cash from business
August 31 - Fahed made repairs of $ 11,000 on account for Tom Brady
August 31 - Paid $ 3,000 for purchase of Office Equipment
Journal Entries :
August 27 Tools R Us (202) - Dr 8000
To Cash at Bank (101) 8000
(Being paid $ 8,000 to Tools R Us for purchases made on August 4)
August 28 Cash at Bank (101) - Dr 5000
To Repair Revenue (401) 5000
(Being received $ 5,000 for repairs made for customer)
August 29 Drawings (503) - Dr 5500
To Cash at Bank (101) 5500
(Being drawings of $ 5,500 made from business by Fahed)
August 31 Tom Brady (104) - Dr 11000
To Repair Revenue (401) 11000
(Being made repairs of $ 11,000 on account for Tom Brady)
August 31 Office Equipment (108) - Dr 3000
To Cash at Bank (101) 3000
(Being paid $ 3,000 for purchase of Office Equipment for Business)
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