Robert Kapela owned and managed a franchise

of Ithaca Espresso, Incorporated. The company's balance sheet accounts had the following

balances on September 1, 20X0, the beginning of a fiscal year:

Ithaca Espresso

Balance Sheet Accounts, September 1, 20X0

Cash $ 13,000

Accounts receivable 5,200

Merchandise inventory 77,800

Prepaid rent 4,000

Store equipment 21,000

Accumulated depreciation, store equipment $ 6,150

Accounts payable 40,000

Paid-in capital 30,000

Retained earnings 44,850

$121,000 $121,000

Summarized transactions for September were as follows:

a. Acquisitions of merchandise inventory on account, $41,000.

b. Sales for cash, $74,250.

c. Payments to creditors, $29,000.

d. Sales on account, $3,000.

e. Advertising in newspapers, paid in cash, $3,000.

f. Cost of goods sold, $45,000.

g. Collections on account, $6,000.

h. Miscellaneous expenses paid in cash, $8,000.

i. Wages paid in cash, $9,000.

j. Entry for rent expense. (Rent was paid quarterly in advance, $6,000 per quarter. Payments

were due on February 1, May 1, August 1, and November 1.)

k. Depreciation of store equipment, $250.

OBJECTIVES 3, 4, 5

1. what is the September 1 balances in T-accounts in a general ledger.

2. what is the journal entries for each transaction.

3. what are the journal entries to the ledger. Key your postings by transaction letter.

4. What would an income statement for September and a balance sheet as of September 30, 20X0 look like?