Question

Assessing Financial Statement Effects of Transactions DeFond Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Expense. Record the following transactions for June using the financial statement effects template. (Record each transaction in the order it appears.) June 1 M. DeFond invested $9,000 cash to begin the business in exchange for common stock. 2 Paid $713 cash for June rent. 3 Purchased $4,800 of office equipment on credit. 6 Purchased $2,850 of art materials and other supplies; the company paid $1,350 cash with the remainder due within 30 days. 11 Billed clients $3,525 for services rendered. 17 Collected $2,438 cash from clients on their accounts billed on June 11. 19 Paid $2,250 cash toward the account for office equipment (see June 3). 25 Paid $675 cash for dividends. 30 Paid $263 cash for June utilities. 30 Paid $1,875 cash for June wages.

Answer 1

SOLUTION:

Debit Credit

Jun-01 Cash 9,000

Common Stock 9,000

Jun-02 Rent expense 713

Cash 713

Jun-03 Office-equipment 4,800

Accounts payable 4,800

Jun-06 Supplies 2,850

Cash 1,350

Accounts payable 1,500

Jun-11 Accounts Receivable 3,525

Service fees earned 3,525

Jun-17 Cash 2,438

Accounts Receivable 2,438

Jun-19 Accounts payable 2,250

Cash 2,250

Jun-25 Dividends 675

Cash 675

Jun-30 Utilities Expense 263

Cash 263

Wage Expense 1,875

Cash 1,875

  

Retained earnings

0 20,600 Beginning balance

18,000 1,000

37,100 0

7,000 0

8,000 0

21,500 Ending balance

Depreciation Expense

Beginning balance 7,000 7,000

Ending balance 0 0

Dividends

Beginning balance 8,000 8,000

Ending balance 0 0

Rent expense

Beginning balance 18,000 18,000

Ending balance 0 0

Salaries expense

Beginning balance 37,100 37,100

Ending balance

Service fees earned

71,000 71,000 Beginning balance

0 0 Ending balance