Derek Scoffin owns and operates YH Curling School on evenings and weekends. The company had the following

Question:

Derek Scoffin owns and operates YH Curling School on evenings and weekends.

The company had the following balances in its general ledger at January 31, 2021: Cash $2,100, Accounts Receivable $720, Equipment $12,400, Accounts Payable $1,470, and D. Scoffin, Capital $13,750. The following events and transactions occurred during February 2021.

Feb. 1 Received and paid a $430 advertising bill.

2 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the first two weeks of February.

3 Collected $4,240 cash for February’s curling lessons.

4 Collected all of the accounts receivable at January 31 in cash.

6 Paid $970 of the accounts payable at January 31.

14 Paid his part-time assistant $400.

15 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the last two weeks of February.

23 Provided $1,475 of coaching services to curlers preparing for a tournament. The curlers will pay him on March 2.

26 Paid $185 cash for the telephone bill for February.

27 Received $2,830 cash for curling lessons in March.

27 Withdrew $575 cash. Used the cash to pay his Visa bill.

28 Paid his part-time assistant $400.

28 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the first two weeks of March.

Instructions

a. Prepare journal entries to record each of YH Curling School’s February transactions.

b. Using T accounts, open the required ledger accounts for the transactions that were journalized, and enter the January 31, 2021, balances.

c. Post the journal entries to the accounts in the ledger.

d. Prepare a trial balance as at February 28, 2021.

e. Prepare an income statement for YH Curling School for the month.

f. Prepare a statement of owner’s equity for the month.

g. Prepare a balance sheet as at February 28, 2021.

Taking it further

Are the February payments to YH Curling Club for ice rental an asset, a reduction of a liability, or an expense? Explain.

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... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... 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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