Question

On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June:

Opened a business bank account with a deposit of $30,000 from personal funds.

Purchased office supplies on account, $1,800.

Received cash from fees earned for managing rental property, $10,000.

Paid rent on office and equipment for the month, $4,500.

Paid creditors on account, $1,250.

Billed customers for fees earned for managing rental property, $16,800.

Paid automobile expenses (including rental charges) for the month, $750, and miscellaneous expenses, $980.

Paid office salaries, $4,000.

Determined that the cost of supplies on hand was $680; therefore, the cost of supplies used was $1,120.

Withdrew cash for personal use, $7,500.

Required:

1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

Assets

Cash

+

Accounts Receivable

+

Supplies

=

Accounts Payable

+

Chad Wilson, Capital

-

Chad Wilson, Drawing

+

Fees Earned

-

Rent Expense

-

Salaries Expense

-

Supplies Expense

-

Auto Expense

-

Misc. Expense

Answer 1