Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jean Howard established an insurance agency on july 1 of thecurrent year and completed the following transactions duringjuly: a. Opened a business bank account with

Jean Howard established an insurance agency on july 1 of thecurrent year and completed the following transactions duringjuly:

a. Opened a business bank account with a deposit of $50,000from personal funds.

b. Purchased supplies on account, $1,600.

c. Paid creditors on account, $500.

d. Received cash from fees earned on insurance commissions,$9,250.

e. Paid rent on office and equipment for the month,$2,500.

f. Paid automobile expenses for month, $900, and miscellaneousexpenses, $300.

g. Paid office salaries, $1,900.

h. Determined that the cost of supplies on hand was $550;therefore, the cost of supplies used was $1,050.

i. Billed insurance companies for sales commissions earned,$11,150.

j. Withdrew cash for personal use, $2,700.

Instructions

1. Indicate the effect of each transaction and the balancesafter each transaction, using the following tabular headings:

Assets= Liabilities+Owner'sEquity

Cash + Accounts Receivable + Supplies = Accounts Payable +Jean Howard, Capital - Jean Howard, Drawing + Fees Earned - RentExpense - Salaries Expense - Supplies Expense - Auto Expense -Miscellaneous Expense

2. Briefly explain why the owner's investment and revenuesincreased owner's equity, while withdrawals and expenses decreasedowner's equity.

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1- 9

Authors: James A Heintz, Robert W Parry

23rd Edition

1337794783, 978-1337794787

More Books

Students also viewed these Accounting questions

Question

=+c) What might you do instead?

Answered: 1 week ago

Question

Define line and staff authority

Answered: 1 week ago

Question

Define the process of communication

Answered: 1 week ago

Question

Explain the importance of effective communication

Answered: 1 week ago

Question

* What is the importance of soil testing in civil engineering?

Answered: 1 week ago

Question

Do not come to the conclusion too quickly

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago