P2-64A. (Learning Objectives 2, 3: Understanding how accounting works; analyzing and recording transactions) During December, Smith Auction Co. completed the following transactions:

Smith’s business uses the following accounts: Cash, Accounts Receivable, Supplies, Land, Accounts Payable, Notes Payable, Share Capital, Dividends, Service Revenue, Salary Expense, Advertising Expense, and Utilities Expense.
Requirements 1. Journalize each transaction of Smith Auction Co. Explanations are not required.
2. Post to these T-accounts: Cash, Accounts Payable, and Notes Payable.
3. After these transactions, how much cash does the business have? How much in total liabilities does it owe?

Transcribed Image Text:

Dec 1 Smith received $25,000 cash and issued ordinary shares to the shareholders. 5 Paid monthly rent, $1,200. 9 10 722 19 31 31 31 Paid $7,200 cash and signed a $31,000 note payable to purchase land for an office site. Purchased supplies on account, $1,500. Paid $700 on account. Borrowed $21,000 from the bank for business use. Smith signed a note payable to the bank in the name of the business. Service revenue earned during the month included $13,000 cash and $7,000 on account. Paid employees' salaries ($2,200), advertising expense ($1,600), and utilities expense ($1,500). Declared and paid a cash dividend of $6,200.