The Woody Shore Company opened their doors to the business on August 31, 2014. T

Question

The Woody Shore Company opened their doors to the business on August 31, 2014. The company incurred the following transactions during August 2014. August 1 The owners deposited $87,000 into the business August 2 Purchased supplies on credit, total $800. August 2 Company purchased a 12 month insurance policy for their business $3,600 August 3 Paid rent for their office $2,800 August 5 Purchased equipment for $15,000 paid cash of $3,000 and signed a note with the bank for the remaining balance. August 9 Completed service for customers and issued invoices, $7,500 August 14 Automobile expense for the company was $825 August 15 Received cash from customer for services provided $2,800 August 18 Paid monthly salary for the employees $4,000 August 22 Paid first installment for note on August 5, 450 August 25 Paid $300 on amount due from August 2 August 30 Customers from August 9 sent you cash for $3,000 August 31 Owners withdrew $2,100 from the company Required: a. Prepare the journal entries for the above transaction using the accounts in the Chart of Accounts; Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accounts Payable, Notes Payable, Capital, Owners Withdrawal, Insurance Expense, Rent Expense, Automobile Expense, Salary Expense . b. Create T accounts for all of the accounts and post the journal entries into the proper accounts. c. Compute the ending balances for each T Account. d. Prepare a Trial Balance as of August 31. e. Prepare the Income Statement, Statement of Owners Equity and the Classified Balance Sheet for the month of August 2014.

Explanation / Answer

Cash $2100

Date Accounts and Description Debit Credit Aug 1 Cash $87,000 Capital $87,000 Aug 2 Supplies $800 Accounts Payable $800 Aug 2 Insurance Expenses $3600 Cash $3600 Aug 3 Rent $2800 Cash $2800 Aug 5 Equipment $15,000 Cash $3,000 Notes Apyable $12,000 Aug 9 Accounts Receivable $7,500 Service Revenue $7,500

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