Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following are the transactions relating to the formation of Gray Mowing Services Inc. and its first month of operations. a. The firm was organized

image text in transcribed
image text in transcribed
The following are the transactions relating to the formation of Gray Mowing Services Inc. and its first month of operations. a. The firm was organized and the initial stockholders invested cash of $12,000. b. The company borrowed $18,000 from a relative of one of the initial stockholders; a short-term note was signed. c. Two zero-turn lawn mowers costing $7,600 each and a professional trimmer costing $2,600 were purchased for cash. The original list price of each mower was $10,200, but a discount was received because the seller was having a sale. d. Gasoline, oil, and several packages of trash bags were purchased for cash of $1.800. e. Advertising flyers announcing the formation of the business and a newspaper ad were purchased. The cost of these items. $3,400, will be paid in 30 days. f. During the first two weeks of operations, 94 lawns were mowed. The total revenue for this work was $14,100; $9,300 was collected in cash, and the balance will be received within 30 days. g. Employees were paid $8,400 for their work during the first two weeks. h. Additional gasoline, oil, and trash bags costing $2,200 were purchased for cash. i. In the last two weeks of the first month, revenues totaled $18,400, of which $7,500 was collected. j. Employee wages for the last two weeks totaled $10,200; these will be paid during the first week of the next month. k. It was determined that at the end of the month the cost of the gasoline, oil, and trash bags still on hand was $600 I. Customers paid a total of $3,000 due from mowing services provided during the first two weeks. The revenue for these services was recognized in transaction f. Required: Prepare the journal entries for above of the transactions. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Saved View transaction list Journal entry worksheet

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

Auditor Independence Auditing Corporate Governance And Market Confidence

Authors: Ismail Adelopo

1st Edition

1409434702, 978-1409434702

More Books

Students also viewed these Accounting questions

Question

6. How do histories influence the process of identity formation?

Answered: 1 week ago