Question
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions.
July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock.
July 3 Paid the current month's rent, $2,500 July 5 Paid the premium on a 1-year insurance policy, $3,600
July 7 Purchased supplies on account from Little Company, $700. July 10 Paid employee salaries, $2,800
July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due.
July 15 Received cash for preparing tax returns for the first half of July, $6,500 July 19 Made payment on account to Lake Company, $500.
July 31 Received cash for preparing tax returns for the last half of July, $8,250
July 31 Declared and paid cash dividends of $450.
1. Prepare journal entries to record the July transactions in the General Journal
2.Post the July journal entries to the following T-accounts and compute ending balances.
Cash (111) | Tax Preparation Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Insurance (117) | Rent Expense (511) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplies (119) | Salaries Expense (512) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment (144) | Insurance Expense (513) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Depreciation-Equipment (145) | Supplies Expense (514) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable (212) | Depreciation Expense (515) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Payable (213) | Income Tax Expense (516) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock (311) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained Earnings (312) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (313 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. Prepare a trial balance for July 4.
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