Question
Brenda Jo Smith is an architect who operates her own business. The transactions for the business during January 2019 follow. Transactions Brenda Jo Smith invested
Brenda Jo Smith is an architect who operates her own business. The transactions for the business during January 2019 follow. Transactions
Brenda Jo Smith invested $20,000 in cash to start the business.
Paid $2,000 for advertisements in a design magazine.
Purchased office furniture for $2,300 in cash.
Performed services for $4,550 in cash.
Paid $210 for the monthly telephone bill.
Performed services for $1,560 on credit.
Purchased a fax machine for $325; paid $75 in cash with the balance due in 30 days.
Paid a bill for $550 from the office cleaning service.
Received $2,130 from clients on account.
Purchased additional office chairs for $545; received credit terms of 30 days.
Paid $4,000 for salaries.
Issued a check for $225 in partial payment of the amount owed for office chairs.
Received $2,300 in cash for services performed.
Issued a check for $460 for utilities expense.
Performed services for $2,150 on credit.
Collected $900 from clients on account.
Brenda Jo Smith withdrew $2,500 in cash for personal expenses.
Paid $600 to Copy Quick for photocopy work performed during the month.
(Hint: Include office cleaning services and photocopy expenses under "Miscellaneous Expenses".) Required: (1) Post the above transactions into the appropriate T accounts. (2) Determine the account balances. Prepare a trial balance, an income statement, a statement of owners equity, and a balance sheet. Analyze: Using the basic accounting equation, what is the financial condition of Brenda Jo Smith's business at month-end? T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.
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