During October 2016, Paws Veterinary Clinic completed the following transactions

Question

During October 2016, Paws Veterinary Clinic completed the following transactions: Oct. 1 Paws received $30,000 cash and issued common shares to shareholders 4 Purchased supplies, $1,000, and equipment, $2,600 on account 5 Performed checkup services, and received cash, $1,500 7 Paid cash to acquire land for an office site, $22,000 11 Performed a surgery on a sick cat, and billed the customer $500 16 Paid for the equipment, purchased Oct 4 on account 17 Paid the telephone bill, $95 18 Received partial payment from client on account, $250 22 Paid the water and electricity bills, $400 29 Received $2,000 cash for conducting a workshop on “Healthy Cat Living” 31 Paid employee salary, $1,300 31 Declared and paid dividends of $1,500

Requirements: 1. Record each transaction in the journal. Key each transaction by date. Explanations are not required. 2. Prepare the trial balance of Paws, at October 31, 2016.

Explanation / Answer

Cash A/c Dr.

To Common stock A/c

(Paws received $30,000 cash and issued common shares to shareholders)

30000

30000

Equipment A/c Dr.

Supplies A/c Dr.

To Cash A/c

(Purchased supplies, $1,000, and equipment, $2,600)

2600

1000

3600

Land A/c Dr.

To Cash A/c

(Paid cash to acquire land for an office site, $22,000)

22000

22000

Telephone A/c Dr.

To Cash A/c

(Paid the telephone bill, $95)

95

Water and electricity A/c Dr.

To Cash A/c

(Paid the water and electricity bills, $400)

400

Cash A/c Dr.

To Workshop A/c

(Received $2,000 cash for conducting a workshop on “Healthy Cat Living” )

2000

2000

Salary A/c Dr.

To Cash A/c

(Paid employee salary, $1,300)

1300

(Declared dividends of $1,500)

Profit and Loss A/c Dr.

To Proposed Dividend A/c

1500

(Paid dividends of $1,500)

Proposed Dividend A/c Dr.

To Bank A/c

1500

Date Particulars Dr. Cr. Oct 1.

Cash A/c Dr.

To Common stock A/c

(Paws received $30,000 cash and issued common shares to shareholders)

30000

30000

Oct 4.

Equipment A/c Dr.

Supplies A/c Dr.

To Cash A/c

(Purchased supplies, $1,000, and equipment, $2,600)

2600

1000

3600

Oct. 7

Land A/c Dr.

To Cash A/c

(Paid cash to acquire land for an office site, $22,000)

22000

22000

Oct. 17

Telephone A/c Dr.

To Cash A/c

(Paid the telephone bill, $95)

95

95 Oct. 22

Water and electricity A/c Dr.

To Cash A/c

(Paid the water and electricity bills, $400)

400

400 Oct. 29

Cash A/c Dr.

To Workshop A/c

(Received $2,000 cash for conducting a workshop on “Healthy Cat Living” )

2000

2000

Oct. 31

Salary A/c Dr.

To Cash A/c

(Paid employee salary, $1,300)

1300

1300 Oct.31

(Declared dividends of $1,500)

Profit and Loss A/c Dr.

To Proposed Dividend A/c

1500

1500

Oct. 31

(Paid dividends of $1,500)

Proposed Dividend A/c Dr.

To Bank A/c

1500

1500

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