Brad Cupello began an upholstery cleaning business on October 1 and engaged in the following transactions during the month:

Oct. 1 Began business by depositing $15,000 in a bank account in the name of company.

2 Ordered cleaning supplies, $3,000.

3 Purchased cleaning equipment for cash, $2,800.

4 Made two months’ van lease payment in advance, $1,200.

7 Received the cleaning supplies ordered on October 2 and agreed to pay half the amount in 10 days and the rest in 30 days.

9 Paid for repairs on the van with cash, $1,080.

12 Received cash for cleaning upholstery, $960.

17 Paid half the amount owed on supplies purchased on October 7, $1,500.

21 Billed customers for cleaning upholstery, $1,340.

24 Paid cash for additional repairs on the van, $80.

27 Received $600 from the customers billed on October 21.

31 Made a cash withdrawal of $700.

Required

1. Set up the following T accounts: Cash; Accounts Receivable; Cleaning Supplies; Prepaid Lease; Cleaning Equipment; Accounts Payable; B. Cupello, Capital; B. Cupello, Withdrawals; Cleaning Revenue; and Repair Expense.

2. Record transactions directly in the T accounts. Identify each entry by date.

3. Prepare a trial balance for Cupello Upholstery Cleaning as of October 31, 2011.

4. Compare and contrast how the issues of recognition, valuation, and classification are settled in the transactions of October 7 and 9.