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Problem 1.5 During the month of June, bon voyage travel recorded the following transactions

3 Problem 1

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Page 1: 3 Problem 1

Problem 1.5

During the month of June, bon voyage travel recorded the following

transactions

Page 2: 3 Problem 1

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

Page 3: 3 Problem 1

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

Page 4: 3 Problem 1

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

Page 5: 3 Problem 1

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

Page 6: 3 Problem 1

$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

Page 7: 3 Problem 1

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

Page 8: 3 Problem 1

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

Page 9: 3 Problem 1

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

Page 10: 3 Problem 1

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

Page 11: 3 Problem 1

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

Page 12: 3 Problem 1

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

Page 13: 3 Problem 1
Page 14: 3 Problem 1

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.

Page 15: 3 Problem 1

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.

Page 16: 3 Problem 1

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.

Page 17: 3 Problem 1

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

Page 18: 3 Problem 1

• 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.