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Posted on Jul 14, 2024

K&M Auto Body, Inc. started 2022 with the following balances: LOADING... (Click the icon to view the balances.) The following transactions occurred during the current

K&M Auto Body, Inc. started 2022 with the following balances: LOADING... (Click the icon to view the balances.) The following transactions occurred during the current year: LOADING... (Click the icon to view the transactions.)Read the requirements LOADING... Requirement a. Show the effect of each transaction on assets, liabilities, and equity using the accounting equation. (If an input field is not used in the table leave the input field empty; do not enter a zero. Enter a decrease in an account with a minus sign or parentheses. Abbreviations used: A/R = Accounts Receivable; Equip. = Equipment; Beg. R/E = Beginning Retained Earnings; Contr. Cap. = Contributed Capital; Inv. = Parts and Supplies Inventory; Rev. = Revenues; Exp. = Expenses; Div. Decl. = Dividends Declared.)

Cash	$45,000
Accounts Receivable	140,000
Equipment	590,000
Accounts Payable	17,500
Salaries Payable	1,000
Notes Payable	99,000
Common Stock	245,000
Retained Earnings	412,500

Show the effect of each transaction on assets, liabilities, and equity using the accounting equation.

Prepare the journal entry for each transaction. Omit explanations..

Post each journal entry to the t-accounts and determine the ending balances of each account at the end of the year.

Assets

Liabilities +

Stockholders' Equity

Retained Earnings

Cash

A/R

Equip.

Inv.

Liabilities

Contr.

Beg.

Rev. and

Exp. and

Div.

Cap.

R/E

Gains

Losses

Decl.

-45000

45000

Requirement b. Prepare the journal entry for each transaction. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.)

a. On January 1, the owners invested a total of

$80,000

(the par value of the stock) as an additional capital contribution. In exchange, the corporation issued the owners 40,000 shares of common stock.

$99,000.b. On March 23, the company paid cash to purchase office equipment for

$8,000.c. On April 18, the company made a payment on the note due to a bank,

d. On May 5, collected the balance of accounts receivable due from the prior year.

e. On May 31, salaries were accrued for time worked in May in the amount of $1,800. These salaries will be paid in June

g. On July 8, the company paid cash for accounting fees in the amount of $8,000.f. On June 30, the company paid cash to employees for salaries accrued on May 31 as well as the balance due from the prior year.

h. On September 6, the company performed repair work on a fleet of vehicles at a total charge of $68,000. The customer paid cash for half of the transaction and put the other half on its credit account with K&M.

i. On November 9, the customer who engaged K&M to do the repair work on September 6 paid off its account balance with cash.

Account	November 9



		j. On December 15, the company made a $5,000 cash payment to purchase parts and supplies (record in Parts and Supplies Inventory).

Account	December 15

Requirement c. Post each journal entry to the t-accounts and determine the ending balances of each account at the end of the year.

Label the beginning balances with Beg. Bal. Use the dates as posting references to post each entry to the relevant accounts, then compute the ending balance of each account. Label the ending balances with End.

Bal. (For accounts with a $0 beginning or ending balance, select "Beg. Bal." or"End. Bal."and enter "0" on the normal balance side of the t-account.)Review the journal entries. LOADING.