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Problem 1.5
During the month of June, bon voyage travel recorded the following
transactions
Transactions 1. Owners invested $25000 in cash to start the business. They
received common stock2. The Month's rent of $500 was prepaid in cash3. Equipment costing $8000 was bought on credit4. $500 was paid for office supplies 5. Advertising costing $750 was paid for with cash6. Paid $3000 employee salaries in cash7. Earned travel commissions of $ 10000 of which $ 2000 was
received in cash8. Paid $ 5000 of the $8000 owed to the equipment supplier9. Used $100 of the office supplies10. Charged $ 1000 of miscellaneous expenses on the corporate
credit card
Owners invested $25000 in cash to start the business. They received
common stock
Cash +Account
s Receivab
le
+Supplies
Inventory + Equipment
=Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. The Month's rent of $500 was prepaid in cash
The Month's rent of $500 was prepaid in cash
Cash +Accounts
Receivable +Supplies
Inventory + Equipment
=Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. Equipment costing $8000 was bought on credit
Equipment costing $8000 was bought on credit
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4.$500 WAS PAID FOR OFFICE SUPPLIES
$500 WAS PAID FOR OFFICE SUPPLIES
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipme
nt=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. Advertising costing $750 was paid for with cash
Advertising costing $750 was paid for with cash
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. - 750
- 750
Advertising
6 Paid $3000 employee salaries in cash
Paid $3000 employee salaries in cash
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. - 750
- 750
Advertising
6. - 3,000
- 3,000
Salaries
7 Earned travel commissions of $ 10000 of which $ 2000 was received in cash
Earned travel commissions of $ 10000 of which $ 2000 was received in cash
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. - 750
- 750
Advertising
6. - 3,000
- 3,000
Salaries
7. + 2,000
+ $8,000
+ 10,000
Commissions
8 Paid $ 5000 of the $8000 owed to the equipment supplier
Paid $ 5000 of the $8000 owed to the equipment supplier
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. - 750
- 750
Advertising
6. - 3,000
- 3,000
Salaries
7. + 2,000
+ $8,000
+ 10,000
Commissions
8. - 5,000
- 5,000
9 Used $100 of the office supplies
Used $100 of the office supplies
Cash +Accounts Receivabl
e+
Supplies Inventory + Equipmen
t=
Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500
- 500
Rent
3. + $8,000
+ $8,000
4. - 500
+ $500
5. - 750
- 750
Advertising
6. - 3,000
- 3,000
Salaries
7. + 2,000
+ $8,000
+ 10,000
Commissions
8. - 5,000
- 5,000
9. - 100
- 100
10. Charged $ 1000 of miscellaneous expenses on the corporate credit card
Charged $ 1000 of miscellaneous expenses on the corporate credit card
Cash +Accounts
Receivable +Supplies
Inventory + Equipment =Accounts Payable +
Owners’ Equity
1. + $25,000
+ $25,000
Investment
2. - 500 - 500 Rent
3. + $8,000
+ $8,000
4. - 500 + $500
5. - 750 - 750 Advertising
6. - 3,000 - 3,000 Salaries
7. + 2,000 + $8,000
+ 10,000
Commissions
8. - 5,000 - 5,000
9. - 100 - 100
10. + 1,000
- 1,000 Expenses
1. Owners invest $20,000 of equity capital in Acme Consulting.
2. Equipment costing $7,000 is purchased for $5,000 cash and an account payable of $2,000.
3. Supplies inventory costing $1,000 is bought for cash.
4. Salaries of $4,500 are paid in cash.
Exercise to do at home
5. Revenues of $10,000 are earned, of which $5,000 has been recovered in cash. The remaining $5,000 is owed to the company by its customers.
6. Accounts payable of $1,500 are paid in cash.7. Customers pay $1,000 of the $5,000 they owe
the company.
8. Rent Expense of $750 is paid in cash.9. Utilities of $500 are paid in cash.10. A $200 travel expense has been incurred but
not yet paid.11. Supplies inventory costing $200 are
consumed.
Ex-2 for H.W
• Merchandise was sold for $12000 cash that had cost $7000.
• To increse inventory, Marvin placed an order with star company for mechandise that world cost $7000.
• Marvin received the mechandise ordered from star and agreed to pay the $7000 in 30days.
• Merchandise costing $2000 was sold for $3400 on 30 day open account
• Merchandise costing $1500 was sold for $2500 in cash
• Merchandise costing $2000was sold for $3400 on 30day open account
• Marvin paid employees for the month $4200 in cash.
• Purchased land for $20000 in cash• Marvin purchased a two year insurance policy
for 2800 in cash.
