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QUESTION TWO (25 Marks) At the beginning of April, Brooke Wilson launched a custom computer programming company called Softways. The company had the following transactions
QUESTION TWO (25 Marks) At the beginning of April, Brooke Wilson launched a custom computer programming company called Softways. The company had the following transactions during April: a Brooke Wilson invested $65.000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment. b. Purchased land for an office. The land is worth $22,000 and is paid for with $5,000 cash and a long-term note payable for $17.000 c. Purchased a portable building with $34,500 cash and moved it onto the business's land. d. Paid $5,000 cash for the premium on a two-year insurance policy. e. Provided services to a client and collected $4,600 cash. f. Purchased additional computer equipment for $4,500 Paid $800 cash and signed a long-term note payable for the $3,700 balance. 2. Completed $4.250 of services for a client. This amount is to be received within 30 days. h. Purchased $950 of additional office equipment on credit. i. Completed client services for $10.200 on credit j. Received a bill for rent of a computer testing device that was used on a recently completed job. The $50 rent must be paid within 30 days. k Collected $5,100 cash from the client described in transaction i. 1. Paid $1,800 cash wages to an assistant. m. Paid cash to settle the account payable created in transaction h. n. Paid $608 cash for some repairs to an item of computer equipment. o. Brooke Wilson withdrew $6,230 cash from the business for personal use. p. Paid $1,800 cash wages to an assistant 4. Paid $750 cash for advertisements in the local newspaper during April 2 1. Open, the following T-accounts: Cash. Accounts Receivable: Prepaid Insurance; Office Equipment; Computer Equipment Building: Land: Accounts Payable: Long- Term Notes Payable: Brooke Wilson, Capital: Brooke Wilson, Withdrawals; Fees Earned: Wages Expense: Computer Rental Expense, Advertising Expense; and Repairs Expense. 2. Record the transactions by entering debits and credits directly in T-accounts. Use the transactions letters to identify each debit and credit. 3. Prepare a trial balance as of April 30
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