Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Show me the steps to solve creating T accounts for the following: Assets Amount Liabilities & Equity Amount Cash $ 1 0 0 , 0

Show me the steps to solve creating T accounts for the following:
Assets Amount Liabilities & Equity Amount
Cash $100,000 Accounts Payable $22,000
Accounts Receivable 35,000 Notes Payable Short term 65,000
Supplies 4,000 Long Term Notes Payable 95,000
Inventory 40,000 Common Stock 30,000
Equipment 200,000 Additional Paid in Capital Common stock 20,000
Accumulated Depreciation-Equipment (40,000) Retained Earnings 195,000
Vehicle 60,000
Accumulated Depreciation-Vehicle (12,000)
Land 40,000
Total Assets $427,000 Total Liabilities & Equity $427,000
Jessica Brady operates a widget shop. The shop specializes in a selection of various widget products. You have been hired as manager. Your duties include maintaining the stores financial records. Here above is the post-closing trial balance accounts at the end of the previous year. The following transactions occurred during January, of this year.
a. Received cash of $40,000 and $60,000 for machinery in exchange for common stock.
b. Purchased inventory for $50,000 on account (2/10 and n/30 days.)
c. Purchased supplies for $7,700 on account.
d. Made sales on account for $98,000 with the costs of $49,000 at 2/10, n/30.(remember there are two entries here)
e. Negotiated and signed a two-year $100,000 loan at the bank, receiving cash at the time.
f. Used the money from (f) to purchase several computers for $7,500; then used the balance for a vehicle-$35,000 and equipment-$57,500 for the shop.
g. Received payment for sales in (e) within the discount period.
h. Paid expenses: advertising expense of $8,000 and salaries of $18,500.
i. Made sales for cash totaling $78,000 with a costs of $36,000.
j. Made a payment on inventory accounts payable balance of $40,000 from transaction c above within the discount period.
k. Collected accounts receivable of $28,000 from customers after discount period.
l. Business is going well so issued more common stock. Sam purchased par value stock of $10,000 for $20,000 cash.
m. Record Deprecation: Help-all assets have no salvage value. Estimated useful lives: computers-3 years; machinery-7 years; vehicle-5 years; and for the equipment-15 years. (a/d-stands for accumulated depreciation)
n. Received a cash payment for widgets in advance of $25,000. Will deliver it next month
o. Office supplies on hand at the end of month were $3,000.
Show me the steps to create T- Accounts Start by setting up all the existing accounts (12) above
in a t account. Then open new accounts when needed. For example the first
transaction adds furniture-a new asset so you will need a new t account for
furniture.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

9th Edition

125972266X, 9781259722660

More Books

Students also viewed these Accounting questions

Question

The various construction management functions

Answered: 1 week ago

Question

_____ 8. the completion of a business deal without the use of money

Answered: 1 week ago

Question

_____ 6. the top trading partner of the United States

Answered: 1 week ago