Question

2. Break To Measure Testing Lab After several months of planning, Denise Murphy started a structural lab-test business for the civil engineering and construction industries called BreakToMeasure. The following events occurred during its first month: a. Murphy started the firm, investing $20,000 in cash. b. BreakToMeasure paid $2,000 for the equipment in cash. c. Break To Measure received a bill for $800 for the rent of the space for this month. Didn't pay the bill yet d. A customer pre-paid $500 in cash for the lab to run some tests next month. e. BreakToMeasure opened for business. Cash received for services performed this month was $700. f. The firm provided $100 of lab-test services on account (IE: it issued the customer an invoice). g. The firm received a $100 check for the lab-test services previously rendered on account. h. The firm paid $250 cash to an assistant for working during the grand opening. i. Paid the bill for rent mentioned in c. in cash. j. Recorded $100 of depreciation on PPE. k. The firm paid $900 cash dividends to Murphy Find: i. Create a Transaction Table for the above events. You may wish to use some or all of the following accounts: Cash; Accounts Receivable; PPE; Accounts Payable; Deferred Revenue; Paid in Capital; Dividends; Revenues; and Expenses.

Answer 1

	Break To measure Testing Lab
	Journal Entries
Date	Particular	Amt(DR)	Amt(CR)
a)	Cash	$    20,000.00
	To Paid in Capital		$                             20,000.00
	(Started a business with cash)
b)	Equipment(PPE)	$      2,000.00
	To Cash		$                               2,000.00
	(Being amount of Equipment Purchased on cash)
c )	Rent	$         800.00
	To Rent Payable		$                                  800.00
	(Being amount of Bill received for rent)
d)	Cash	$         500.00
	To Deferred Revenue		$                                  500.00
	(Being amount received in advance)
e)	Cash	$         700.00
	To Service Revenue		$                                  700.00
	(Being amount of cash received for service provided)
f)	Accounts Receivable	$         100.00
	To Service revenue		$                                  100.00
	(Being amount of services performed on account)
g)	Cash	$         100.00
	To Accounts Receivable		$                                  100.00
	(Being amount of cash received)
h)	Salaries Expense	$         250.00
	To Cash		$                                  250.00
	(Being amount paid to assistant)
i)	Rent Payable	$         800.00
	To Cash		$                                  800.00
	(Being amount of Cash paid for rent)
j)	Depreciation	$         100.00
	To Accumulated Depreciation		$                                  100.00
	(Being amount of Depreciation for Property,Plant and Equipment)
k)	Dividends	$         900.00
	To Cash		$                                  900.00
	(Being amount of Dividend Paid to Murphy)
	Cash
Date	Account Title & Explanation	Debit	Credit	Balance
a)		$    20,000.00		$       20,000.00
b)			$                               2,000.00	$       18,000.00
d)		$         500.00		$       18,500.00
e)		$         700.00		$       19,200.00
g)		$         100.00		$       19,300.00
h)			$                                  250.00	$       19,050.00
i)			$                                  800.00	$       18,250.00
k)			$                                  900.00	$       17,350.00
	Paid in Capital
Date	Account Title & Explanation	Debit	Credit	Balance
a)			$                             20,000.00	$       20,000.00
	Equipment
				Balance
Date	Account Title & Explanation	Debit	Credit	$         2,000.00
b)	To Cash	$      2,000.00
	Rent Expense
Date	Account Title & Explanation	Debit	Credit	Balance
c)		$         800.00		$            800.00
	Rent Payable
Date	Account Title & Explanation	Debit	Credit	Balance
c)			$                                  800.00	$            800.00
i)		$         800.00		$                    -
	Deferred Revenue
Date	Account Title & Explanation	Debit	Credit	Balance
d)			$                                  500.00	$            500.00
	Service Revenue
Date	Account Title & Explanation	Debit	Credit	Balance
e)			$                                  700.00	$            700.00
f)			$                                  100.00	$            800.00
	Accounts Receivable
Date	Account Title & Explanation	Debit	Credit	Balance
f)		$         100.00		$            100.00
g)			$                                  100.00	$                    -
	Salaries Expense
Date	Account Title & Explanation	Debit	Credit	Balance
h)		$         250.00		$            250.00
	Depreciation Expense
Date	Account Title & Explanation	Debit	Credit	Balance
J)		$         100.00		$            100.00
	Accumulated Depreciation
Date	Account Title & Explanation	Debit	Credit	Balance
j)			$                                  100.00	$            100.00
	Dividend
Date	Account Title & Explanation	Dr	CR	Balance
k)	Cash	$         900.00		$            900.00