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Journal entries and t accounts Frodo Baggins set up Hobbit Consulting, a service business at the beginning of May 2018. The business transactions that occurred
Journal entries and t accounts
Frodo Baggins set up Hobbit Consulting, a service business at the beginning of May 2018. The business transactions that occurred during the month of May were as follows: 1. May 1 - Frodo put the following assets into the business a. Cash $20,000 b. Accounts Receivable $14,700 C. Supplies $3,300 d. Office Equipment $12,000 2. May 2-Purchased additional office equipment on account for $8,000 from Samwise Gamgee 3. May 5-Paid 6 month's rent on a lease contract in advance, $6,000 4. May 10 - Paid cash for a newspaper advertisement, $350 5. May 18 - Provided services to clients on account, $11,700 6. May 20 - Paid Merri and Pippin a 2 week salary of $1,650 7. May 25 - Paid $6,400 to Samwise Gamgee for part of the debt incurred on May 8. May 27 - Received cash from clients of $9,400 as an advance payment of services to be provided in the future 9. May 29 - Frodo withdrew $9,000 for personal use At the end of May, the following adjusting entries were required in the accounts 1. 1 month has passed on the lease contract (May 5 Transaction) 2. Supplies on hand at 31 May were $1,225 3. Depreciation of office equipment was $400 4. Frodo provided some services to clients and earned fees that were previously unearned. Therefore unearned fees at the 31 May are $2,350 Step by Step Solution
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