Question
Comprehensive Problem - Fred Silverman began a business called Silverman Accounting Service on March 1, 2022. You have just been hired as the bookkeeper for
Comprehensive Problem - Fred Silverman began a business called Silverman Accounting Service on March 1, 2022. You have just been hired as the bookkeeper for the business. The following transactions occurred during the first month of operations:
3/1 Silverman Accounting Service began operations when Fred invested $14,000 cash, a computer worth $4,000, and office furniture worth $12,000. This can all be recorded in one journal entry, all of this is considered an owner investment (hint you will have 3 debits and one credit).
3/1 The business purchased insurance and paid $3,000 cash for a six-month policy. The policy coverage period begins on March 1 of this year.
3/2 They moved into the new office space and paid $4,000 for the monthly rent.
3/4 The owner went to the office supply store and purchased $800 of office supplies for cash.
3/12 The business performed accounting services for a client and received $3,000 in cash. (Note there are two revenue accounts, keep this in mind every time you record either accounting service revenue or tax service revenue).
3/15 Fred completed a complicated tax return for a client and sent them an invoice for $6,000. The client agreed to pay before the end of the month.
3/18 You calculated the payroll costs and paid the employees salaries of $2,000.
3/19 The business purchased supplies of $1,500 on account (for credit, we will pay for these supplies later).
3/20 Finished an accounting services job and received $5,000 cash.
3/22 Collected $4,000 in advance for tax services to be completed next month.
3/25 Collected $6,000 from the client billed on 3/15.
3/27 Received the utility bill of $2,500. The bill will be paid next week.
3/28 Performed accounting services on account (for credit, we will collect this money next month), $3,500.
3/30 Paid $1,000 of the amount we owed from the 3/19 purchase.
3/31 Fred withdrew cash of $7,500.
Requirements:
1. Record each transaction in the general journal using the following chart of accounts. Explanations are not necessary.
101 | Cash |
105 | Accounts receivable |
110 | Office supplies |
115 | Prepaid insurance |
130 | Computer equipment |
131 | Accumulated depreciation, computer equipment |
140 | Furniture |
141 | Accumulated depreciation, furniture |
201 | Accounts payable |
205 | Salaries payable |
210 | Unearned tax services revenue |
301 | F. Silverman, Capital |
301 | F. Silverman, Withdrawals |
401 | Accounting services revenue |
402 | Tax service s revenue |
502 | Rent expense |
504 | Office supplies expense |
506 | Salaries expense |
508 | Utilities expense |
520 | Depreciation expense, computer equipment |
522 | Depreciation expense, furniture |
530 | Insurance expense |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started