Question

Requirement #1: 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 $60,000, in exchange for 6,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $3,500 July 5 Paid the premium on a 1-year insurance policy, $4,200 - July 7 Purchased supplies on account from Little Company, $1,000. July 10 Paid employee salaries, $3,500 July 14 Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was placed on account. Payments will be $500.00 per month until the equipment is paid. 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, $8,000 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $9,000 July 31 Declared and paid cash dividends of $600. Use the following account names for journal entries. Chart of Accounts: Account Title (Normal Balance) Assets Cash (Debit) Prepaid Insurance (Debit) Supplies (Debit) Equipment (Debit) Accumulated Depreciation - Equipment (Credit) Liabilities Accounts Payable (Credit) Income Tax Payable (Credit) Stockholders' Equity Common Stock (Credit) Retained Earnings (Credit) Dividends (Debit) Revenue Tax Preparation Revenue (Credit) Expenses Rent Expense (Debit) Salaries Expense (Debit) Insurance Expense (Debit) Supplies Expense (Debit) Depreciation Expense (Debit) Income Tax Expense (Debit) Credit General Journal Description(Account Name) Debit Cash S 60,000 Common Stock $ 60,000 S Rent Expense Cash 3,500 $ 3,500 $ Prepaid Insurance Cash 4,200 S 4,200 $ 1,000 Supplies Accounts Payable $ 1,000 $ Salaries Expense Cash 3,500 $ 3,500 -1 2 Date 3 July 1 4 5 6 July 3 -7 8 9 July 5 -0 -1 -2 July 7 3 4 5 July 10 6 7 8 July 14 9 -0 1 -2 July 15 3 -4 5 July 19 6 -7 8 July 31 9 0 1 July 31 2 3 4 5 $ 10,000 Equipment Cash Accounts Payable $ S 2,500 7,500 $ 8,000 Cash Tax Preparation Revenue 6 8,000 S 500 Accounts Payable Cash $ 500 $ 9,000 Cash Tax Preparation Revenue $ 9,000 $ 600 Dividends Cash $ 600 $ 100,300 $ 100,300 This Sheet will be used for Requirements 2, 5, and 9. Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Accounts Payable (212 preciation Expense (5 come Tax Payable (21 come Tax Expense (51 Prepaid Insurance (117) Rent Expense (511) Common Stock (311) Retained Eamings (312 Supplies (119) Salaries Expense (512) Dividends (313 Equipment (144) Insurance Expense (513) Accumulated Depreciation Equipment (145) Supplies Expense (514)