Following are business activities completed by Joel Douglas during the month of November 2014:
a. Invested $100,000 cash and office equipment with a $9,000 fair value in a new sole proprietorship named Douglas Tax Consulting.
b. Purchased land and a small office building. The land was worth $115,000, and the building was worth $85,000. The purchase price was paid with $80,000 cash and a long-term note payable for the balance.
c. Purchased $4,600 of office supplies on credit.
d. Joel Douglas transferred title of his personal automobile to the business. The automobile had a value of $9,000 and was to be used exclusively in the business.
e. Purchased $3,000 of additional office equipment on credit.
f. Paid $3,200 wages to an assistant.
g. Provided services to a client and collected $16,000 cash.
h. Paid $ 1,800 for the month's utilities.
i. Signed an equipment rental agreement to commence in January. A deposit of $250 must be paid by December 15.
j. Paid the account payable created in transaction (c).
k. Purchased $ 10,000 of new office equipment by paying $9,300 cash and trading in old equipment with a recorded cost of $700.
1. Completed $5,100 of services for a client. This amount is to be paid within 30 days,
m. Paid $3,200 wages to an assistant.
n. Received $1,900 payment on the receivable created in transaction (1).
o. Withdrew $3,200 cash from the business for personal use.
Required
1. Set up the following T-accounts: Cash; Accounts Receivable; Office Supplies; Automobiles; Office Equipment; Building; Land; Accounts Payable; Long-Term Notes Payable; Joel Douglas, Capital; Joel Douglas, Withdrawals; Fees Earned; Wages Expense; and Utilities Expense.
2. Record the effects of the transactions by entering debits and credits directly in the T-accounts. Use the transaction letters to identify each debit and credit entry.