Question

Accounting: a. Capital stock issued: $40,000 b. Office equipment rented (and paid for in cash): $2,000 c. Office supplies purchased (and paid in cash): $1,000 d. Cleaning supplies (bought on credit): $1,200 e. Land and building purchased on a L.T. note: $30,000 f. Utilities (paid in cash): $1,200 g. Salaries paid in cash to employees: $6,000 h. Sales revenues: $17,500 i. Advance collected from customers: $3,000 j. Sales made on credit to customers: $3,500 You are required to: (1) Summarize and post the above transactions (2) Prepare an income statement (3) Prepare a balance sheet

Answer 1

1		Journal Entries
						2)	Income Statement
	Date	General Journal	Debit	Credit			Particulars	Amount($)	Particulars	Amount($)
			In ($)				Office supplies Purchases	1,000	Sales	21,000
							Cleaning supplies Purchases	1,200
	a)	Cash A/c	40,000				Rent	2,000
		To Common (Capital) Stock a/c		40,000			Utilities	1,200
							Salaries	6,000
		(Issue of capital stock)
							Net profit c/d	9,600
	b)	Rent A/c	2,000					21,000		21,000
		To Cash a/c		2,000
		(Office equipments rented)					Balance Sheet
							Liabilities	Amount($)	Assets	Amount($)
	c)	Office Supplies A/c	1,000				Capital Stock	40,000	Land and Building	30,000
		To Cash a/c		1,000			Net Profit	9,600	Cash	20,300
							Advance from Customers	3,000	Accounts Receivable	3,500
		(Office supplies purchased)					Accounts Payable	1,200
								53,800		53,800
	d)	Purchases A/c	1,200
		To Accounts Payable a/c		1,200
		(Cleaning supplies purchased)
	e)	Land and Building A/c	30,000
		To Cash a/c		30,000
		(land and building purchased)
	f)	Utilities expenses A/c	1,200
		To Cash a/c		1,200
		(Utilities paid for cash)
	g)	Salaries A/c	6,000
		To Cash a/c		6,000
		(Salaries paid for cash)
	h)	Cash A/c	17,500
		To Sales a/c		17,500
		(Sales Revenue for cash)
	i)	Cash A/c	3,000
		To Advance from Customers a/c		3,000
		(Advance from customers)
	j)	Accounts Receivable A/c	3,500
		To Sales a/c		3,500
		(Sales on credit)