Transaction: 1) October 1, 2016: Opened a bank account for Craft Fair rentals wi
ID: 2607980 • Letter: T
Question
Transaction: 1) October 1, 2016: Opened a bank account for Craft Fair rentals with $100.
2) October 1, 2016: Took out a loan $14,000 from Best Bank and deposited it into the account to pay for expenses. Record as Best Bank Loan payable.
3) October 1, 2016: Bought 20 folding tables from Staples for $1,500 on account. Expect the tables to last 3 years with no disposal value
4) October 1, 2016: Bought 40 chairs from Staples for $1,200 on account. Expect the chairs to last 2 years with no disposal value
5) October 2, 2016: bought 40 table cloths for $800 from Sears on account. Expect to last only 1 season, so expense.
6) October 2, 2016: bought cleaning supplies for $97.00 from Super Store. Paid cash. Will use up within the year.
7) October 5, 2016: Purchased a cash register for $2,500 from ABC Business Machines. It is expected to last 5 years.
8) October 1, 2016: paid $6,000 for 3 months’ rental, (October 1 to December 31, 2017) to OK Hall rentals.
9) October 31, 2016: Best Bank charge, interest on loan $33.33, other bank charges $7.50
10) October 31, 2016: Received $4,800 for the month for table rentals. All paid in cash.
11) October 31, 2016: Paid the Staples account $2,200.
12) October 31, 2016: Mr. Bro drew $3,000 out for his living expenses.
13) November 5, 2016: Paid Sears account $800.00 cash for table cloths. (see #5)
14) November 15, 2016: Paid “The Fix-it Man” $79.00 cash for repairs on the tables.
15) November 30, 2016: Sales invoice 1002 for table rentals of $9,000. $5,000 was paid in cash, balance on account.
16) November 30, 2016: Interest on loan, $33.33 and bank charges $7.50
17) November 30, 2016: Mr. Bro drew $3,000 out for his living expenses.
18) December 14, 2016: Received $4,000 cash for the balance of invoice #1002
19) December 15, 2016: Sales invoice 1003 for table rentals of $7,000. $5,000 in cash, balance on account.
20) December 29, 2016: Sales invoice 1004 for table rentals of $3,000, $1,000 in cash, balance on account.
21) December 30, 2016: Received $2,000 cash for payment of invoice 1003. (see # 20)
22) December 30, 2016: The Fix-it Man charged $58.00 for repairs. Will be paid in January.
23) December 31, 2016: Best Bank interest on loan of $33.33 and bank charges of $7.50.
24) December 31, 2016: Mr. Bro drew $3,000 out for his living expenses.
25) December 31, 2016: Paid $7,000 on the loan owing to Best Bank.
December 31, 2016: Computed amortization expense and accumulated amortization of $500 for the tables, $600 for the chairs and $500 for the cash registrar.
Q1:Prepare the journal entries to record the transactions.
a)Post the journal entries to a T-account
b) Prepare the trial balance
c) Prepare the income statement of the owner's equity for three months (Oct-December)
d) Prepare the balance sheet as of Dec. 31
e) Was the fall work successful? Should it continue in the fall 2017? Give reasons
Explanation / Answer
Yes. The work is successful & can be continued as it has earned positive net income
Sl.No. Date Account Title Debit Credit 1 Oct.1 Cash 100 Cash 100 2 Cash 14000 Best Bank Loan payable 14000 3 Furniture& Fixtures 1500 Account payable 1500 4 Furniture& Fixtures 1200 Account payable 1200 8 Rent expenses 6000 Cash 6000 5 Oct.2 Utilities expense 800 Account payable 800 6 Cleaning supplies expense 97 Cash 97 7 Oct.5 Furniture& Fixtures 2500 Account payable 2500 9 Interest expense 33.33 Miscellaneous expense 7.5 Cash 40.83 10 Cash 4800 Rental revenue 4800 11 Account Payable 2200 Cash 2200 12 Bro Drawings 3000 Cash 3000 13 Nov.5 Account payable 800 Cash 800 14 Nov.15 Repair expenses 79 Cash 79 15 Nov.30 Account Receivable 4000 Cash 5000 Rental revenue 9000 16 Interest expense 33.33 Miscellaneous expense 7.5 Cash 40.83 17 Bro Drawings 3000 Cash 3000 18 14-Dec Cash 4000 Account Receivable 4000 19 15-Dec Account Receivable 2000 Cash 5000 Rental revenue 7000 20 29-Dec Account Receivable 2000 Cash 1000 Rental revenue 3000 21 30-Dec Cash 2000 Account Receivable 2000 22 Repair expenses 58 Account payable 58 23 31-Dec Interest expense 33.33 Miscellaneous expense 7.5 Cash 40.83 24 Bro Drawings 3000 Cash 3000 25 Best Bank Loan payable 7000 Cash 7000 26 Depreciation expense_Furn.& Fix. 1600 Accumulated depn.Furniture & fixtures 1600 76856.49 76856.49Related Questions
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