Write your answer in the space provided or on a sepa . rate sheet of paper. sine

Question

Write your answer in the space provided or on a sepa . rate sheet of paper. sinewcompany organized as a sole proprietorship. The following transactions ocurred d the first month of a) Received $15,000 cash from the owner, Marjorie Johnson, in exchange for capital. b) Paid the first month's rent with $800 cash. c) Purchased equipment by paying $4,000 cash and executing a note payable for $4,000 d) Purchased office supplies for $200 cash. The supplies remain at the end of the month. e) Billed clients for a total of $7,000 for design services rendered. f Received $1,000 cash from clients for services rendered above. Required: 1. Prepare journal entries and post the journal entries to T-accounts. 2. Prepare a trial balance at the end of the first month using the above transactions. 18) Calculate the debt ratio using the following trial balance of Superior Instruments Company as of December 31,2 Superior Instruments Company Adjusted Trial Balance December 31, 2019 Debit $88,800 5,000 3,400 70,000 16,500 2,000 Account Title Cash Accounts Receivable Office Supplies Land Building Equipment Accounts Payable Notes Payable Superior, Capital Superior, Withdrawals Service Revenue Utilities Expense Salaries Expense Advertising Expense Total Credit $ 15,000 60,000 50,000 1,200 72,000 4,100 4,000 2.000 $197.000 $197000

Explanation / Answer

18. Debt Ratio

1 Journal Entries: Date Account Debit Credit a Cash 15000 Capital, Marjorie 15000 b Rent Expense 800 Cash 800 c Equipment 8000 Cash 4000 Note Payable 4000 d Office Supplies 200 Cash 200 e Accounts Receivable 7000 Service Revenue 7000 f Cash 1000 Accounts Receivable 1000

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