Ike Petrov started a tour company, Tour-Along, on October 1, 2020. The following activities occurred during November,

Question:

Ike Petrov started a tour company, Tour-Along, on October 1, 2020. The following activities occurred during November, the second month of operations:

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Required

1. Prepare journal entries to record the November transactions.

2. Set up the following T-accounts, entering the balances brought forward from October 31, 2020: Cash (101) $26,000; Office Supplies (124) $900; Office Equipment (163) $36,000; Accounts Payable (201) $43,000; Notes Payable (205) $20,000; Ike Petrov, Capital (301) $8,000; Ike Petrov, Withdrawals (302) $4,000; Travel Revenue (401) $34,000; Wage Expense (623) $38,000; and Interest Expense (633) $100.

3. Post the entries to the T-accounts; calculate the ending balance in each account.

4. Prepare a trial balance at November 30, 2020.

5. Use the trial balance to prepare an income statement and statement of changes in equity for the two months ended November 30, 2020, as well as a balance sheet at November 30, 2020.

Analysis Component: Part 2 of the Required states that the account Ike Petrov, Capital had a balance of $8,000 at October 31, 2020. Explain what this balance represents.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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